April 27, 2007

 

CBOT Corn Outlook on Friday: Down 1-2 cents on drier US Midwest weather

 

 

Chicago Board of Trade corn futures are expected to start trading 1-to-2 cents lower Friday following weaker prices overnight and forecasts for warmer and drier weather in the U.S. Midwest over the weekend and early next week, a commission house analyst said.

 

In overnight electronic trading, May corn fell 2 1/2 cents to US$3.62 1/4 per bushel, July declined 2 1/4 cents to US$3.73 and December fell 2 cents to US$3.72. E-CBOT volume in July was 4,116 contracts.

 

Corn should begin trading on the defensive on ideas that drier and warmer weather forecast for the U.S. Midwest will allow farmers back into their fields and resume planting, a floor analyst said. It looks to be dry extending into much of next week which should help pick up the corn planting pace, he added.

 

Although the weather should help dry out the fields, corn planting is still expected to be well behind the average planting pace in Monday's crop conditions report, a floor trader added.

 

There is not much fresh news out to influence the market, so price direction could depend upon speculative interest and technical factors, the floor trader said.

 

In the western U.S. Midwest, drier weather is expected to last well into next week and planting conditions should improve by the early to middle part of next week, DTN Meteorologix Weather said. Dry weather is forecast this weekend with only a few light showers expected on Monday. Temperatures Saturday will be above-normal, with much-above normal readings Sunday and above-to-much-above normal temperatures on Monday.

 

In the eastern sections of the region, dry weather is predicted through Monday with weekend temperatures near-to above normal and above to much-above normal Monday, Meteorologix Weather said.

 

In the 6-to-10 day outlook, temperatures are expected to average near-to-above normal west and near-to-below normal east. Precipitation is forecast near-to-below normal, except possibly higher in southern Missouri and southern Illinois, DTN Meteorologix Weather said.

 

On daily technical charts, July corn closed nearer the session low in choppy activity and corn should continue to see choppy activity, a technical analyst said. Bulls would gain fresh technical momentum by closing prices above resistance at US$3.85, while the bears' next downside price objective pushing prices below solid support at US$3.69 1/2.

 

First resistance for July is seen at US$3.80 and then at US$3.85. First support is pegged at Thursday's low of US$3.69 1/2 and then at US$3.65.

 

In other corn news, corn futures on China's Dalian Futures Exchange settled lower with the September contract down RMB/6 at RMB1,655/tonne.