August 4, 2006

 

CBOT Corn Outlook on Friday: 2-4 cents higher on weather forecasts

 

 

Corn futures are expected to begin trading 2-4 cents higher on supportive weather forecasts with the market expected to add in weather premium ahead of the weekend, sources said.

 

In overnight e-CBOT trading, September corn rose 3 3/4 cents to US$2.48 3/4 per bushel and December gained 3 1/2 cents to US$2.65 1/2. Volume in December on e-CBOT overnight was 6,896 contracts.

 

Going into the weekend the weather remains a key, and the market should add back in a little weather premium on the forecasts, said Don Roose, president of U.S. Commodities in West Des Moines, Iowa.

 

Informa Economics corn production estimate was a little bigger than expected but the government's numbers are the only ones that count, he added.

 

Informa estimated 2006-07 U.S. corn production at 10.857 billion bushels, with a yield of 150.8 bushels per acre, sources said Friday.

 

The market continues to remain well supported by the huge demand for corn. The eastern corn belt appears to have an excellent crop while the western belt crop is suspect, so it's really demand and anticipated demand that is underpinning the market, Roose said.

 

In the western U.S. Midwest, dry conditions are forecast until Sunday with scattered showers and thunderstorms over northern areas on Sunday, DTN Meteorologix Weather said. Dry conditions or just a few light showers are forecast from Monday-Thursday of next week, with locally heavier amounts possible. Temperatures are expected to be above normal with highs in the upper 80's Fahrenheit to upper 90's F.

 

In the 6-to-10 day outlook temperatures are predicted mostly above normal and rainfall mostly below normal.

 

In the eastern U.S. Midwest, dry conditions are expected in the near-term with the period from Sunday through Thursday dry or with just a few light showers possible, DTN Meteorologix Weather said. Temperatures are expected to be above normal with highs in the upper 80's F to upper 90's F.

 

In the 6-to-10 day outlook temperatures are predicted mostly above normal and rainfall mostly below normal.

 

On technical charts, bulls still have some upside technical momentum, technical analyst said. The next upside price objective for market bulls is closing above this week's high of US$2.65 1/2. First resistance is seen at US$2.68, and then at US$2.65 1/2. First support is seen at Thursday's low of US$2.61 and then at US$2.58.

 

Cash corn basis bids were mostly unchanged Friday morning. Central Illinois was unchanged at 14 cents under the September future.

 

In other corn news, South Korea's Nonghyup Feed Inc. or NOFI, is seeking 110,000 metric tonnes of optional-origin corn in a tender to be concluded Friday, a company official said.

 

The Ukrainian Agricultural Industry increased its corn harvest estimate to 8 million metric tonnes from the previous 7.2 million tonnes Friday. Improved weather conditions from earlier in the year were cited as the reason for the increase.

 

Corn futures on China's Dalian Commodities exchange settled higher with May 2007 up RMB/2 at RMB/1,405/tonne.