CBOT corn outlook: Seen up, recovering from steep slide

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U.S. corn futures are expected to start stronger Monday as commodity markets recover from last week's slide.

Traders and analysts project corn for July delivery, the most-actively traded contract, will start 5 cents to 10 cents a bushel higher at the Chicago Board of Trade. In overnight electronic trading, the contract jumped 10 1/4 cents, or 1.5%, to $6.96 1/2 a bushel.

Futures are due for a rebound after sinking more than 9% last week on broad selling of commodities. Gains in crude oil and weakness in the U.S. dollar should help lift corn after the external markets pressured the grains last week, traders said. Crude oil is linked to the grains because ethanol is made from corn and funds often trade in a basket of commodities. A soft dollar is often considered supportive because it makes U.S. commodities more attractive to foreign buyers.

"After last week's large sell off of over 70 cents in the old crop contracts and 30 cents in the December contract, the market is set to move higher this morning as commodities in general are higher and the U.S. dollar is lower," said Jason Holthaus, analyst for Country Hedging, a brokerage in Minnesota.

The setback in corn last week came after prices in April reached a record high on concerns about strong demand draining low inventories. The nearby contract is down nearly 11.5% from that level.

Yet, grain users remain nervous that farmers will struggle to produce a crop that is large enough to meet demand and rebuild inventories. Conditions have been too wet and cold in the Midwest and northern Plains for farmers to plant corn quickly.

Warmer weather in the Ohio River Valley and middle and lower Mississippi River Valley early this week should help dry up fields that are away from the rivers, according to Telvent DTN, a private weather firm. Still, near-record flooding is expected along the lower Mississippi River this week. Rains in northern areas also "will cause planting delays sooner rather than later," the firm warned.

Poor weather could prevent farmers from sowing all the corn acres they originally intended. Private analytical firm Informa Economics on Friday pegged plantings at 91.9 million acres, below the government's latest forecast for 92.2 million.

The U.S. Department of Agriculture will issue an update on planting in a weekly crop progress report at 4 p.m. EDT. AgResource, an agricultural consultancy in Chicago, projects plantings will be 31% to 36% complete. A week ago, the crop was 13% sown, down from 66% a year earlier, when farmers planted at a speedy pace, and below the five-year average of 40% for that time of year.



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