April 26, 2007

 

CBOT Corn Review on Wednesday: Rallies on weather concerns, speculative buying

 

 

Chicago Board of Trade corn futures ended with moderate advances Wednesday, but well off of the limit gains set in the nearby contracts earlier in the session.

 

May corn settled 10 3/4 cents higher to US$3.71 1/4 per bushel, July rose 10 1/2 cents to US$3.81 3/4 and December settled 7 cents higher at US$3.79 1/2.

 

"It's all about the weather," said Don Roose, president of US Commodities in West Des Moines, Iowa. The trade is very concerned that the window of opportunity to plant corn is "not there," so the market put some risk premium back into the market, Roose said.

 

Heavy rainfall overnight in Iowa, Missouri, and Illinois supported prices on concerns that corn planting, already delayed due to poor planting weather, would continue to be behind last year and the five-year average as farmers would be unable to enter their fields during the next several days due to excessive moisture, a commission house analyst said.

 

Speculative fund buying helped push prices in the nearby contracts to limit up levels with bull spreading also pushing the old crop higher, a floor trader said.

 

Fund buying was estimated at 15,000 contracts.

 

There continues to be conflicting weather forecasts for late next week and that led to profit taking, trimming the gains, the trader added. Thursday's price direction will continue to be influenced by the weather, the trader said.

 

Early next week warmer and drier weather is expected in the U.S. Midwest, however the last half of the week has a strong chance for additional precipitation in the Midwest, DTN Meteorologix Weather said.

 

On open auction technical charts, July futures gapped open higher and settled above its 20-day moving average for the first time since March 8.

 

In pit trading, buyers included Man Financial, which bought 1,000 December and 1,000 July, Fortis, which bought 1,000 December and 500 July, and UBS, which bought 800 July and 800 December.

 

In options trading, Man Financial bought 1,200 September US$3.60 puts and sold 1,200 September US$3.20 puts and 1,200 September US$4.60 calls.

 

Oat futures ended higher on spillover buying from stronger corn and wheat futures, a floor analyst said.

 

May oats gained 9 1/2 cents to US$2.62 per bushel and July rose 8 cents to US$2.65.

 

Ethanol futures settled higher in thin activity with the May contract up 3.6 cents to US$2.222 per gallon. June ethanol gained 4.5 cents to US$2.17.

 

Thursday, the U.S. Department of Agriculture is scheduled to release the weekly export sales report for the week ended April 19 at 8:30 a.m. EDT (1230 GMT). Analysts expect weekly corn sales between 600,000-900,000 metric tonnes. Last week sales totaled 865,800 tonnes.