August 25, 2008


CBOT Corn Outlook on Monday: Up 10-15 cents on dry weather jitters



Nervousness about the potential for damaging dry weather in the U.S. Midwest is expected to push Chicago Board of Trade corn futures 10 to 15 cents per bushel higher at the start of Monday's day session.


In overnight electronic trading, nearby CBOT September corn jumped 12 1/4 cents to US$5.98 3/4. CBOT December corn overnight climbed 13 3/4 cents to US$6.20 1/4.


Filling corn and soybeans in key parts of the Midwest will continue to be "under some stress due to late season dryness" during the next 10 days, DTN Meteorlogix said in a forecast. However, no significant cold is expected for at least the next 10 days, the private weather firm said.


Any rain that fell during the weekend was "light and scattered," said Tomm Pfitzenmaier, senior analyst for Summit Commodity Brokerage. There is "a fairly large section of the corn belt that has had little rain through the month of August," he said.


Traders are putting some weather premium back in the market, a CBOT floor broker said. The prospect of reduced yield and an even smaller crop has the market on edge, he said.


"The crop's late," he said. "We didn't get much rain."


Professional Farmers of America on Friday estimated the 2008-09 U.S. corn crop at 12.152 billion bushels and the U.S. soybean crop at 2.930 billion bushels. That was below the U.S. Department of Agriculture's latest projections for a corn crop of 12.288 billion bushels and a soybean crop of 2.973 billion bushels.


The USDA at 4 p.m. EDT (2000 GMT) is slated to issue its weekly crop progress report, including data on the development and condition of the corn and soy crops. Development of the row crops has lagged due to late planting and cool, wet spring weather.


The outside markets on Monday morning are little changed and should have little impact on corn, Pfitzenmaier said. Weather "is trumping those influences," he said.


CBOT December corn Friday closed near the session low amid pressure from bearish outside markets, including a sharply higher U.S. dollar and sharply lower crude oil prices. Bulls still have the near-term technical advantage in corn as a three-week-old uptrend remains in place on the daily bar chart, a technical analyst said.


The bulls' next upside price objective is to push and close CBOT December corn above solid technical resistance at last week's high of US$6.25, the analyst said. The next downside price objective for the bears is to push and close prices below psychological support at US$6.00, he said.


First resistance for December corn is seen at Friday's high of US$6.17 and then at US$6.25. First support is seen at US$6.00 and then at US$5.94.

Video >

Follow Us