September 25, 2009

 

CBOT Corn Outlook on Friday: Seen steady-weaker, watching weather

 

 

Chicago Board of Trade corn futures are expected to open steady to lower Friday, with traders watching weather forecasts and waiting to see whether the market has enough giddy-up to rally again.

 

In overnight electronic trading, CBOT December corn slipped 3/4 cent to US$3.35 3/4 per bushel.

 

The "big question" coming into Friday's session is whether corn will close higher after lower overnight trade, said Brian Hoops, president of Midwest Market Solutions. Each day this week, corn has rallied after a lower opening and closed higher than the opening, he said.

 

"Funds have been the best buyers this week, covering short positions as the corn market has acted better from a technical perspective," Hoops said.

 

It was a "bullish clue" that corn rose Thursday, despite a down day in outside markets, a technical analyst said. Crude oil, metals and equities are weaker Friday.

 

The bulls' next upside price objective is to push December corn above solid technical resistance at the September high of US$3.47 3/4, the technical analyst said. The next downside price objective for the bears is to push and close the contract below major psychological support at US$3.00, he said.

 

First resistance for December corn is seen at Thursday's high of US$3.38 and then at US$3.40. First support is seen at US$3.30 and then at US$3.25.

 

"This week's price action does suggest that a market bottom or harvest low is in place," the technical analyst said.

 

Traders continue to keep an eye on the weather amid worries about the late maturing U.S. crop. The market could chop around as they try to assess what conditions will be like next week, an analyst said.

 

A cooler and drier pattern will develop in crop areas early next week, with temperatures expected to drop into the 30s Fahrenheit in northern areas of the corn belt, according to a forecast from T-Storm Weather. A killing frost remains unlikely, the private weather firm said.

 

North Dakota's Red River Valley may have a light frost event Monday and then again Friday, but the remainder of the country looks frost free over the next 10-12 days, according to a note from Country Hedging. The market is particularly sensitive to frost threats this year because crop development was delayed by a late spring planting and generally cool summer.

 

"The Midwest looks to be frost free through the next 10-12 days," Hoops said.

 

The current rain event will finish up Saturday, with lighter amounts than previously indicated in most areas, Hoops said. The next general rain is still seen by the second half of next week, he said.