October 6, 2006

 

CBOT Corn Outlook on Friday: Steady start expected

 

 

Chicago Board of Trade corn futures are expected to begin trading steady Friday following the tone set in overnight activity as the lack of fresh news keeps corn looking to other markets for direction, sources said. In overnight e-CBOT trading, December corn ended unchanged at US$2.71 3/4 per bushel and March slipped 1/4 cent to US$2.83. e-CBOT volume in December was 6,254 contracts.

 

There is little fresh news out, so corn will look to wheat for direction Friday morning, a floor analyst said. Wheat has been dominating the markets with its recent volatility and corn could remain in its recent role of a follower, he added.

 

Favorable weather in the U.S. Midwest over the next several days could lead bring harvest pressure on the market as producers are expected to actively combine their crop, a commission house analyst said.

 

The western U.S. Midwest is expected to by mainly dry through Sunday with only a few light showers late in the weekend, DTN Meteorologix Weather said. Light or locally moderate showers are predicted in southern parts of the region Monday with scattered light showers Tuesday night into Wednesday. Temperatures are expected above normal Saturday and Sunday and below normal Monday and Tuesday.

 

In the eastern U.S. Midwest, mostly dry weather is predicted through Sunday with only a few light showers possible on Monday and Tuesday, Meteorologix Weather said. Temperatures will average near to above normal for the period.

 

On technical charts, no chart damage occurred Thursday in December corn and bulls still have technical momentum on their side, and are positioned to make a run at the contract high of US$2.87 1/4. a technical analyst said. First resistance for December corn is seen at US$2.76 1/4 and then at US$2.78. First support is pegged at US$2.69 1/2 and then at US$2.67 1/2. Corn basis bids were unchanged to lower Friday. Central Illinois was unchanged at 5 cents under the December future.

 

In other corn news, corn prices are likely to decline in the coming months with the upcoming harvest in October and November liable to pressure an already oversupplied market, analysts said.

 

China's corn output is expected to total 141 million metric tonnes in the 2006-07 marketing year, up from 139 million tonnes last year, according to the China National Grain & Oils Information Center.

 

Demand for corn from U.S. ethanol producers is likely to force chicken producers to pay more and compete harder for the feed corn they need, U.S. chicken industry leaders said Thursday.

 

Ukraine harvested 1.734 million metric tonnes to date with an average yield of 3.41 tonnes a hectare, the agriculture ministry said Friday.

 

China's corn futures markets remain closed due to a holiday.