April 13, 2006

 

CBOT Corn Review on Wednesday: Down on good midwest weather, fund sales

 

 

Corn futures at the Chicago Board of Trade settled lower Wednesday, undermined by favorable planting weather and fund selling, floor sources said.

 

May corn declined 5 cents to US$2.37 per bushel, July fell 5 cents to US$2.48 3/4, and December finished 4 1/2 cents lower at US$2.69 1/4.

 

"The weather is bearish and the funds sold it," a floor analyst said. The weather remains conducive for corn planting to continue, he added.

 

Early in the session, light fund buying supported futures, sources said, before funds turned into sellers as the session continued, they added.

 

Fund selling was estimated at a net 4,500 contracts.

 

Technical weakness also undermined futures after May corn fell below support at US$2.38 and December slipped beneath US$2.70, a floor trader said.

 

Active rolling out of spot-month May and into July due to repositioning by commodity indices was also noted. Floor traders estimated 15,000-20,000 contracts rolled over.

 

Reports that a private firm's market analyst said soybean-planted acres could decline with corn acres garnering most of the acres was discounted by floor sources who noted this was already in the market.

 

Corn was overbought near-term and due for a small correction, a commission house analyst said. The weather remains the key for corn right now, he added.

 

A chance for a few light showers in the northern areas of the western U.S. Midwest are forecast for Thursday, before drier weather returns to the region Friday, DTN Meteorlogix Weather said. Showers and possible thundershowers return over the weekend with amounts .30-1.00 inch and locally heavier with the balance of the region seeing only .10-.50 inch of moisture, DTN Meteorlogix Weather said. Temperatures should average above normal during the weekend.

 

In the eastern U.S. Midwest corn belt, episodes of light rain or showers are forecast over the next several days, with additional scattered showers during the weekend for the northern and eastern areas of the region, DTN Meteorlogix Weather said. Amounts of .10-.50 inch expected early in the period. Temperatures are forecast to average above or well above normal, DTN Weather added.

 

Buyers on Wednesday included UBS, which bought 5,000 May. RJ O'Brien bought 2,000 May and 1,000 July, Iowa Grain bought 500 July, JP Morgan bought 600 December, and Rand Financial bought 500 May and 200 December.

 

Sellers Wednesday included Goldenberg-Hehmeyer, which sold 2,000 July and 1,000 May. Fimat sold 2,000 May and 1,000 July, Citigroup sold 1,000 July and 500 May, ABN Amro sold 1,000 May, and RJ O'Brien sold 600 December.

 

Oat futures settled fractionally mixed in light trade as the market remains near the lower end of its recent trading range, a floor source said. May oats ended up 1/2 cent at US$1.71 3/4 per bushel, and July ended unchanged at US$1.76 3/4.

 

Ethanol futures settled unchanged to mostly lower. The April contract did not trade and settled at US$2.73 per gallon, unchanged on the session. May fell 3 cents to US$2.70, and June ended unchanged at US$2.74.

 

On Thursday, the U.S. Department of Agriculture is scheduled to release the weekly export sales report at 7:30 a.m. CDT (1230 GMT). Analysts expected old- and new-crop corn sales between 700,000-950,000 metric tonnes for the week ended Apr. 6

 

On Friday, the CBOT will be closed for the Good Friday Holiday.