July 27, 2007

 

CBOT Corn Outlook on Friday: Mixed on lack of news, weather

 

 

Chicago Board of Trade corn futures are expected to start Friday's day session mixed on a lack of fresh fundamental news and mixed overnight weather forecasts, analysts said.

 

In overnight electronic trading, September corn gained 2 1/2 cents to US$3.19 per bushel, and December rose 1 1/4 cents to US$3.34 1/4. e-CBOT volume in December was 4,897 contracts.

 

Corn should open mixed continuing overnight trading patterns as the market awaits fresh fundamental news, looking ahead to Monday's crop condition report, analysts said. There is little fresh fundamental news for the market to focus on Friday, a trader said.

 

Crop conditions are expected to decline in the USDA's weekly crop progress report Monday after mostly dry weather in the western Midwest this week, a trader said. Prices are expected to chop inside a range Friday on crop progress expectations and increased moisture in Nebraska and Iowa, traders said.

 

Positioning for Monday's report could add some support to corn prices at lower levels, while resistance will probably be found at the higher price levels on better than expected rains in Western Iowa Thursday night, and expected rainfall in Nebraska during the weekend, a trader said.

 

Both Iowa and Nebraska have been in need of beneficial rains to help crops get through the end of their key development stage, traders said. However, other portions of the western corn belt, including South Dakota and western Minnesota still need rainfall and are expected to see some crop stress due to dryness, DTN Meterologix said, and weather forecasts for next week call for hotter, drier weather in the corn belt.

 

In the western U.S. Midwest, there's a possibility of light showers south with dryness elsewhere, Friday, DTN Meteorologix said. Thunderstorms are possible in central and eastern Nebraska during the weekend, and into Monday and Tuesday in central Nebraska, with dry conditions in the rest of the region.

 

Temperatures in the region should average near-to-below normal Friday, near-to-above normal during the weekend and above normal Monday and Tuesday, DTN said.

 

In the eastern U.S. Midwest, weather forecasts predict showers and thundershowers in southern and eastern Illinois moving to Ohio and Michigan Friday and lingering near the Ohio River Saturday, DTN said. Conditions will be mostly dry Sunday through Tuesday.

 

Temperatures in the region will average near-to-above normal through Tuesday, DTN said.

 

The 6-10 day outlook calls for temperatures averaging near-to-above normal and rainfall near-to-below normal.

 

On daily technical charts, December corn prices Thursday closed nearer the session low. Short covering in a bear market was featured. There was some support coming from new contract highs in wheat and some hotter and drier weather forecasts for the Corn Belt next week, a technical analyst said.

 

In December, the next downside price objective for the bears is to close prices below solid support at this week's low of US$3.24 1/2. The bulls' next upside price objective is closing prices above solid technical resistance at Thursday's high of US$3.40 1/2.

 

First resistance for December corn is seen at US$3.36 and then at US$3.40 1/2. First support is seen at Thursday's low of US$3.29 and then at this week's low of US$3.24 1/2.

 

In other corn news, corn futures on China's Dalian Commodities Exchange were higher with the benchmark January contract up RMB11 at RMB1,495 per metric tonne.