April 17, 2007

 

CBOT Corn Review on Monday: Lower on dry near-term weather forecast

 

 

Chicago Board of Trade corn futures finished with modest losses Monday but above earlier levels as thin short covering after midday weather forecasts helped trim the declines, floor traders said.

 

May corn settled 4 3/4 cents lower to US$3.64 1/4 per bushel, July fell 5 1/2 cents to US$3.76 and December declined 4 3/4 cents to US$3.90 1/4.

 

Drier and warmer weather forecasts this week led to ideas that producers would be able to enter their fields and resume planting, keeping prices on the defensive for most of the session, floor traders said.

 

Corn staged a mild recovery after midsession as midday forecasts retained wet weather outlooks for next week and the week after, leading to renewed planting-delay concerns, a commission house analyst said.

 

"It's all about the weather; it's the single most important issue," said Vic Lespinasse of AG Edwards & Sons. The forecast is dry for this week which pressed the market, but the longer-term forecasts remain wet and that limited the downside. The crop progress reports will be closely watched but farmers have to plant more corn this year, so the pace of planting has to be above the average to get all the corn planted, Lespinasse said.

 

The U.S. Department of Agriculture is scheduled to release the weekly crop progress report at 4 p.m. EDT (2000 GMT).

 

Analysts expect 5%-to-8% of the crop has been planted versus 9% a year ago and the five-year average of 10%.

 

During the session the USDA reported weekly corn export inspections were 29.9 million bushels for the week ended April 12, within the range expected by analysts, but the report had little impact, a trader said. The market's attention is turned toward the weather and the planting pace, he said.

 

Corn's price direction Tuesday is dependent upon the weather forecast and the crop progress report due out Monday afternoon, Lespinasse said.

 

On daily technical charts, July settled above its 200-day moving average.

 

Buyers Monday included Man Financial, which bought 300 December and 200 July. Rand sold 800 December and ADM sold 500 December.

 

Commodity fund selling was estimated at 3,000 contracts.

 

In options trading, Man Financial bought 2,500 July US$5.00 calls and sold 2,500 July US$5.60 calls. JP Morgan sold 1,000 December US$4.50 calls.

 

Oat futures ended lower Monday, with the market on the defensive following the weaker tonnee in corn, a floor analyst said. People are rolling out of May and into the deferred months and the CFTC report still has the funds with large long positions, he added.

 

May oats ended 2 1/4 cents lower at US$2.68 3/4 cents per bushel and July fell 1 1/4 cents to US$2.74 3/4.

 

Ethanol futures settled lower in thin trading. The May contract ended down .002 cent at US$2.203 cents per gallon. June ethanol finished 2 cents lower at US$2.13.