April 12, 2006

 

CBOT Corn Review on Tuesday: Thin gains; shrugs off good weather

 

 

Corn futures at the Chicago Board of Trade finished Tuesday with light gains, shrugging off earlier modest losses as speculative buying helped reverse the declines after midday, sources said.

 

May corn settled 3/4 cent higher at US$2.42 per bushel, July corn gained 1 cent to US$2.53 3/4 and December corn finished 1 cent higher at US$2.73 3/4.

 

The weather is favorable to planting corn but speculators took the opportunity to buy corn when it couldn't trade below US$2.39 in the May and held US$2.70 in December, a floor analyst said.

 

"Nobody really wants to short corn," a commission house analyst said. The funds are long, and until they decide to sell, any market declines will be short-lived.

 

Earlier, weather forecasts favorable for corn planting and light technical weakness limited buying interest in a relatively quiet trading session, a floor trader said.

 

In addition, some people took the opportunity to unwind their long corn-short soybeans and long corn-short wheat trades, he added.

 

Spillover from firm soybean and wheat futures helped provide some support, the trader noted.

 

May wheat rose 6 1/2 cents to US$3.67 1/2 and May soybeans gained 7 1/4 cents to US$5.62 1/2 per bushel.

 

In the western U.S. Midwest, scattered showers and thunderstorms are forecast over the next 24 hours with amounts of .10-.50 inch expected, DTN Meteorlogix Weather said. Mostly dry weather returns through Friday before another round of showers and thunderstorms are expected on Saturday.

 

In the eastern U.S. Midwest scattered showers and thunderstorms are predicted on Wednesday with amounts of .10-.50 inch and locally heavier, DTN Meteorlogix Weather said. Dry conditions return to the region Thursday, before light scattered showers are forecast for Friday and Saturday, they added. Temperatures over the next 6-10 days are predicted near to above normal across much of the U.S. Midwest.

 

Buyers Tuesday included Calyon Financial, which bought 1,000 December. JP Morgan bought 1,000 July and 400 December, Citigroup bought 400 December, RJ O'Brien bought 400 May, Fimat bought 300 May and 300 July, and DT Trading bought 300 May.

 

Sellers Tuesday included O'Connor, which sold 200 May and 800 December. JP Morgan sold 600 December, Tenco sold 700 December, Fimat sold 600 May, UBS sold 400 December, and FC Stonnee sold 400 December.

 

Oat futures finished mixed as light short covering helped steady prices, floor sources said. The May contract ended down 1 cent at US$1.71 1/4 while the July contract gained 1/4 cent to US$1.76 3/4.

 

Ethanol futures ended mostly higher. The April contract did not trade but rose 5 1/2 cents higher to US$2.73 per gallon. The May contract settled 5 cents higher to US$2.73.