August 25, 2006

 

CBOT Corn Outlook on Friday: Steady-weaker on little fresh news

 

 

Overnight weakness and a dearth of fresh news is expected to pressure corn futures at Chicago Board of Trade Friday, analysts said.

 

Most active December is called to open steady to 1 cent a bushel weaker.

 

In e-cbot trade, December corn was 1 1/2-cents lower at US$2.42 3/4 a bushel. Volume was light.

 

"The market was oversold earlier and we had a technical bounce on the Pro Farmer tour news, but now that's digested and we're going to do a back and fill trade," said Don Roose, president, U.S. Commodities.

 

On the final days of the tour, scouts on the eastern leg said corn yields were a bit disappointing. This, and speculative buying, helped corn rally earlier this week.

 

Iowa farms appear poised to produce steady corn yields, with crop scouts involved in the John Deere/Pro Farmer Midwest Crop Tour estimating average yields of 145.99 bushels per acre, compared with tour forecasts of 145.33 bushels on the 2005 tour. The U.S. Department of Agriculture Aug. 11 presently predicts statewide corn yields of 173 bushels an acre for the state of Iowa, which is also steady with final yields achieved in 2005.

 

Scouts in Minnesota's estimated corn production at 150.15 bushels per acre, below the tour's 163.27 bushel estimate in 2005. The USDA projected corn production in Minnesota at 160.0 bushels per acre in its Aug. 1 survey, 14 bushels below its final 2005 estimate. Pro Farmer is scheduled to release its national projections for total U.S. corn and soybean production Friday at 1330 CDT (1830 GMT).

 

The weather for the market is generally benign, analysts said. DTN Meteorologix said Midwestern rainfall during the five day period will favor filling crops but may be unfavorable for any maturing crops. There is no significant cold weather in sight.

 

In other news, three separate towboat accidents Thursday forced the U.S. Coast Guard to close the lower Mississippi River in three areas, while crews work to free the barges and open the river back up to traffic. The accidents were in Louisiana, Mississippi and Arkansas.

 

"It'll back up grain a little bit and is going to be negative for basis," Roose said.