CBOT Corn Outlook on Friday: Up on short covering; bullish outside markets
December corn was last traded in overnight electronic trading up 4 cents a bushel at US$3.28.
Heading into the weekend, corn traders appear ready to buy back previously sold (or short) futures positions, which is called short covering, said an analyst. Earlier this week December corn notched a fresh nearly three-year low of US$3.11 1/2 a bushel.
The key "outside markets" are in a bullish posture for the grain futures Friday morning. The crude oil futures market is higher, the value of the U.S. dollar against the other major currencies is lower and the U.S. stock indexes are firmer. "That's a formula for higher grain prices today," said Victor Lespinasse, longtime grain market analyst with www.grainanalyst.com.
The Pro Farmer Midwest Crop Tour, on its last leg Thursday, found an average Iowa corn yield of 180.97 bushels per acre, which compares with last year's yield of 168.33 bushels and a 3-year average of 165.20 bushels per acre. The bigger Iowa yield estimate from the tour is not surprising, said Lespinasse. "Traders figured Iowa (yields) would be bigger and Illinois (yields) would be smaller," he said.
The crop tour also found an average Minnesota corn yield of 185.31 bushels per acre, which compares with last year's yield of 178.35 bushels and a 3-year average of 170.79 bushels per acre. Pro Farmer will release its estimates of the U.S. corn and soybean crops Friday at 1:30 p.m. CDT.
The weather forecast from the National Weather Service has flip-flopped on its temperature expectations for the Corn Belt. The NWS forecast for Aug. 26-30 now calls for below-normal temperatures across the Corn Belt, accompanied by above-normal precipitation. "Another round of rains would be welcome in most fields, but cooler temps won't help the crop with maturity," said an analyst.
