April 21, 2007

 

CBOT Corn Review on Friday: Ends down on weather, speculative selling

 

 

Chicago Board of Trade corn futures settled lower Friday as drier weather forecasts and fund-led speculative selling kept prices on the defensive, a commission house analyst said.

 

May corn settled 10 3/4 cents lower at US$3.60 1/2, July fell 10 1/4 cents to US$3.72, and December declined 5 1/4 cents to US$3.74 3/4.

 

"A lot of Friday's price weakness was weather-related," said Jack Scoville, vice president at Price Futures Group. There are several days of clear weather ahead of the next rain event, allowing farmers to plant corn, he said.

 

Speculative fund selling also pressured prices as the technical charts look poor, Scoville added. Fund selling was estimated at 5,000 contracts.

 

The nearby contracts led the way lower as July has gained almost 20 cents on December in the past several sessions and was due to give some of those gains back, a floor analyst said. Talk of active corn planting in central and southern Illinois was also a bearish factor, the floor analyst said.

 

Thursday's export sales were "less than a thrill," and probably added to the weak tonnee Friday, Scoville said.

 

Corn's price direction on Monday depends on the weather forecast and "if the weather is decent corn could struggle," said Scoville.

 

A period of generally dry and open weather for field work in the central U.S. is expected for the weekend, with the eastern Midwest expected to be dry through Monday, DTN Meteorologix Weather said. Temperatures are forecast in the 70s degree Fahrenheit for the period, Meteorologix Weather said.

 

On technical charts, July futures finished below its 10-day and 20-day moving averages.

 

In options trading, Fimat bought 1,000 May US$3.70 puts and sold 1,000 May US$3.70 calls. May corn options expired on Friday.

 

Oat futures settled lower with moderate losses set in the nearby months as light selling interest and the absence of buyers pushed the nearby contracts lower, a commission house analyst said. Spillover weakness from corn also added to the declines, the analyst said.

 

May oats dropped 10 cents to US$2.58 per bushel and July settled 11 3/4 cents lower at US$2.63 1/4.

 

Ethanol futures settled mixed in light activity with the May contract ending 4.6 cents lower to US$2.11 per gallon. June ethanol fell 3 cents to US$2.07.

 

Friday afternoon, the Commodity Futures Trading Commission will release the weekly commitment of traders report for the period ending April 17.

 

Monday the U.S. Department of Agriculture is scheduled to release the weekly export inspections report at 11 a.m. EDT (1500 GMT). And at 4 p.m. EDT (2000 GMT), the weekly crop progress report is scheduled for release. Last week, 4% of the U.S. crop had been planted compared to the 8% in 2006 and the five-year average of 9%.