July 28, 2006

CBOT Corn Outlook on Friday: Up 1-2 cents; heat, fund buying

Corn futures at the Chicago Board of Trade are predicted to begin open auction trading steady to 1-2 cents higher Friday, floor sources said.

High temperatures forecast for the next 6 days with little rain are expected to promote further fund buying, said one analyst.

In overnight e-CBOT trading, September corn gained 1 1/4 cents to US$2.39 per bushel and December also ended 1 1/4 cent higher at US$2.55 1/2.

On technical charts, last week's low of US$2.51 is still strong technical support. A close below that level would produce more chart damage. The next major near-term downside price objective is the June low of US$2.47 3/4. The next upside price objective is closing prices above chart resistance at this week's high of US$2.60 3/4. First resistance for December corn is seen at US$2.56 and then at US$2.58. First support is seen at US$2.52 - Thursday's low - and then at US$2.51.

Weather forecasts show little rain and high temperatures until late next week, one analyst noted.

In the western U.S. Midwest, temperatures are predicted to average above or well above normal through Monday, with temperatures of 92-100F over the weekend, DTN Meteorologix Weather said. Forecasts predict dry weather with a few showers in the far north through the weekend, and a chance for scattered thundershowers during Tuesday and into Wednesday, DTN Meteorologix Weather said.

In the 6-10 day outlook, temperatures are expected to average near to above normal, and precipitation near to below normal, DTN Meteorologix Weather said.

In the eastern U.S. Midwest, high temperatures may reach the upper 80s to middle 90 through the weekend, and highs in the middle to upper 90s early in the week, DTN Meteorologix Weather said. Scattered thundershowers are expected during Wednesday or Thursday, with temperatures remaining above normal. There is a chance for thunderstorms to develop in the north during the weekend, but otherwise mainly dry through Monday, DTN Meteorologix Weather said.

In the 6-10 day outlook, temperatures are expected to average above normal with near to below normal rainfall, DTN Meteorologix Weather said.

In overseas trade, corn futures settled higher on China's Dalian Commodity Exchange. The most widely held May 2007 contract settled at RMB1,415/tonne, up RMB6.