October 5, 2007

 

CBOT Corn Outlook on Friday: Down 1/2-1 cent, waiting on fresh inputs

 

 

Chicago Board of Trade corn futures are predicted to begin trading 1/2-to-1 cent lower Friday as the lack of fresh inputs is expected to keep the market in a consolidating type pattern, analysts said.

 

In overnight electronic trading, December corn fell 1/2 cent to US$3.41 3/4 per bushel and March slipped 1 cent to US$3.58. E-CBOT volume in December was 3,107 contracts.

 

The market should open slightly weaker in line with the overnight session as the lack of fresh news limits price direction, a commission house analyst said. Recent technical weakness has pressured corn and most participants expect the government will increase its production estimate next Friday, limiting buying enthusiasm, the analyst said.

 

Corn is waiting on a crop production estimate from Informa Economics due out sometime during the session to provide direction, a trader said. Trading is expected to be quiet with financial futures closing early Friday and with Monday a holiday in many markets, the trader said.

 

Corn trading has been influenced by the wheat market and wheat was lower overnight so corn is unlikely to trade higher without fresh news and any wheat spillover, an analyst said.

 

Rain in Minnesota Friday and in Iowa later this weekend will likely lead to harvest delays for corn, DTN Meteorlogix Weather said.

 

In the western U.S. Midwest rain and thunderstorms develop and are expected to continue into Monday with amounts of .30-1.50 inches and locally heavier. Temperatures are expected to average above or well above normal through Monday.

 

In the eastern U.S. Midwest, mostly dry weather is forecast through Sunday with scattered showers developing Monday or Tuesday, Meteorlogix said. Temperatures are expected to average well above normal in the period with highs reaching 90 degrees Fahrenheit or higher in many locations, Meteorlogix Weather said.

 

On daily open auction technical charts, December corn settled lower and hit another fresh three-week low, a technical analyst said. Serious near-term chart damage has been set this week to suggest more downside potential exists, the analyst said. A decline to the US$3.30 level would likely be considered a "value buy" by some traders. The next downside price objective for market bears remains closing prices below solid support at the September low of US$3.35 1/2. The bulls' next upside price objective is to close prices above solid resistance at US$3.50.

 

First resistance for December corn is seen at US$3.48 1/4 - Thursday's high, and then at US$3.51 1/4. First support is seen at US$3.41, Thursday's low and then at US$3.38.

 

In other corn news, corn futures on China's Dalian Commodities Exchange remained closed due to the National Day holiday.