November 7, 2008
CBOT Corn Outlook on Friday: Up 3-5 cents on weak dollar, but oil mixed
U.S. corn futures are called to open 3-5 cents a bushel higher Friday, as the outside influence of a weaker dollar may create light buying support for the Chicago Board of Trade grain and soy complex, traders said.
December corn gained 5 1/2 cents to end at US$3.83 1/2 overnight, and March rose 4 1/2 cents to end at US$4.00 a bushel.
The much-watched crude oil market, which was higher earlier in electronic trading, has turned mixed, which may provide selling pressure in the grain pit. One broker said he wouldn't be surprised to see mixed trade develop in grains after the recent losses and ahead of the government's crop report Monday.
The wild card in the equation is the stock market, analysts said. Equity futures are slightly higher ahead of the open, but a dismal jobs outlook could ultimately pressure the broad market.
The U.S. unemployment rate leapt to a 14-year high of 6.5% in October as the economy lost nearly a quarter of a million jobs. Nonfarm payrolls dropped by 240,000 following a revised 284,000 loss in September. That makes a total of 1.18 million jobs the U.S. has lost so far this year.
The news was worse than analysts had feared, as they expected unemployment to rise to 6.3% from 6.1% in September.
The grain markets have been held hostage the last two days to the sharp losses on Wall Street and the tumble in crude oil futures.
"Corn followed stocks sharply lower on Thursday, as gloom and doom on Wall Street was matched by concern the global economic slowdown is hurting demand for grains," said Bryce Knorr, senior editor at Farm Futures.
Recent rain, wind and much colder temperatures are expected to cause harvest delays in the western and central Midwest, although drier conditions in the east may allow producers to get more fieldwork done, at least until the next system moves in early next week, private forecaster DTN Meteorlogix said.
The grain markets may also see some positioning ahead of Monday's release of the U.S. Agriculture Department's November crop production and supply/demand reports.
On average, analysts expect the USDA to nudge the average corn yield up to 154.3 bushels an acre, from 153.9 bushels, pushing up 2008-09 production slightly to 12.066 billion from 12.033 billion bushels, a Dow Jones Newswires survey found.
The slight rise in production is expected to take ending stocks up to 1.160 billion bushels, from 1.088 billion.