April 18, 2007

 

CBOT Corn Review on Tuesday: Down on technical weakness, planting concerns

 

 

Chicago Board of Trade corn futures settled moderately lower and near session lows Tuesday, dragged by technical weakness and ideas that corn planting would increase this week as drier weather allows farmers into their fields in parts of the U.S. Midwest, analysts said.

 

May corn settled 11 cents lower at US$3.53 1/4 per bushel, July declined 10 3/4 cents to US$3.65 1/4 and December also fell 10 3/4 cents to US$3.79 1/2.

 

Good planting weather this week will allow some corn seeding to occur, and as a result, traders took some premium out of the market, said Brian Hoops, president of Midwest Market Solutions in Yanktonne, S.D.

 

Corn planting will probably not fall further below the pace it's already behind, and the market sold off as a result, Hoops said.

 

Monday, the U.S. Department of Agriculture reported that 4% of the U.S. corn crop had been planted as of April 15, below the 8% planted in 2006 and the five-year average of 9%.

 

On technical charts, corn fell below its 10-day moving averages in May, July and December futures, and that encouraged speculative interests to liquidate positions, a floor-based commission house analyst said.

 

As long as the overnight forecasts don't indicate poor planting weather, the weak technical pattern of the market should weigh on prices Wednesday, the commission house analyst said.

 

Mostly dry and mild weather conditions are forecast during the next three days, which will allow some fieldwork to occur, though soil temperatures are expected to remain cool, DTN Meteorologix Weather said.

 

On daily technical charts, July corn settled below its 10-day moving average and at settled at its lowest level since April 3.

 

Buyers Tuesday included Tenco, which bought 600 July, and FC Stonnee, which bought 200 May and 200 July.

 

Tenco sold 1,000 December and 1,500 December 2008 and Rand sold 800 May.

 

Commodity fund selling was estimated at 4,000 contracts.