April 24, 2007

 

CBOT Corn Review on Monday: Declines on improving weather outlook

 

 

Chicago Board of Trade corn futures settled moderately lower Monday as better-than-expected planting weather over the weekend in much of the U.S. Midwest and favorable weather forecasts for late April and into early May pressured corn values, floor traders said.

 

May corn fell 8 1/4 cents to US$3.52 1/4 per bushel, July declined 8 cents to US$3.64 and December fell 6 1/4 cents to US$3.68 1/2.

 

The weather over the weekend was better than anticipated, and the forecast for late April and into early May indicates warmer- and drier-than-normal weather, which would allow the corn planting pace to "catch up" to normal levels, said Brian Hoops, president of Midwest Market Solutions in Yanktonne, S.D.

 

The 6-to-10 day weather outlook calls for temperatures to average near to above normal, with precipitation near to below normal, DTN Meteorologix Weather said.

 

Speculative liquidation was also a feature, with the weak technical pattern encouraging the funds to sell, a floor trader said. Fund selling was estimated between 7,000 and 8,000 contracts.

 

"The market currently believes that there will not be a problem planting this year's corn crop," said Joe Bedore, floor manager with FC Stonnee.

 

Tuesday's price direction depends on Monday afternoon's crop progress report, Bedore said.

 

Analysts expect that the U.S. Department of Agriculture will report Monday afternoon that 14%-18% of the U.S. corn crop has been planted through April 22.

 

On technical charts, July futures settled at their lowest level since early April but remained above their 200-day moving average.

 

In options trading, Man Financial bought 3,000 June US$3.50 calls and sold 3,000 July US$4.00 calls. ADM bought 1,000 December US$3.60 puts and sold 1,000 December US$3.80 calls.

 

Oat futures ended lower as speculative selling pressured prices, a floor analyst said. The funds remain in liquidation mode and the market came under pressure as a result, he said.

 

May oats declined 4 cents to US$2.54 per bushel and July ended 5 1/2 cents lower at US$2.57 3/4.

 

Ethanol futures ended higher in modest activity, with the May contract up 4 cents at US$2.15 per gallon. June ethanol also gained 4 cents to US$2.11.

 

Monday afternoon, the USDA is scheduled to release the weekly crop progress report at 4 p.m. EDT (2000 GMT). Last week, 4% of the U.S. crop had been planted compared to the 8% in 2006 and the five-year average of 9%.