April 27, 2007

 

CBOT Corn Review on Thursday: Settles lower on profit taking, forecasts

 

 

Chicago Board of Trade corn futures settled lower Thursday, unable to maintain overnight and opening level gains as profit taking and bearishly construed mid-day weather forecasts pressured prices, analysts said.

 

May corn settled 6 1/2 cents lower to US$3.64 3/4 per bushel, July also fell 6 1/2 cents to US$3.75 1/4 and December declined 5 1/2 cents to US$3.74.

 

Corn was directionless and traded on either side of Wednesday's settlement prices for much of the session, unable to maintain a higher or lower tonnee. Although mid-day weather forecasts were conflicting, one forecast predicting drier-than-expected weather at the end of next week influenced price direction leading to a modest sell-off, analysts said.

 

The market tried to extend its overnight rally but with four-to-five days of drier weather expected after the current rain event moves through the US Midwest, participants took some profits, said Jack Scoville, vice president at Price Futures Group.

 

In late trading technical selling emerged to briefly push prices to double-digit losses after July fell below support at US$3.75, a commission house analyst said.

 

Although weekly export sales were good, the sales didn't have much of an impact on the market, Scoville said.

 

The U.S. Department of Agriculture reported weekly corn export sales were 1.233 million metric tonnes for the week ended April 19, above the 600,000-900,000 metric tonnes expected by analysts.

 

Friday's market direction will depend upon the overnight weather forecasts, Scoville said.

 

On open auction technical charts, July futures settled above its 10-day, and 20-day moving averages.

 

In open auction trading, buyers included Fimat, which bought 1,500 July, and Man Financial, which bought 700 July.

 

Commodity fund selling was estimated at 1,500 contracts.

 

In options trading, Man Financial bought 800 December US$4.00 calls and sold 800 December US$5.00 calls.

 

Oat futures settled mixed in two-sided activity. Light fund buying helped underpin futures early in the session, but the gains were unable to be sustained as spillover weakness from corn limited the upside, a commission house analyst said.

 

May oats settled 1 1/2 cents higher to US$2.63 1/2 per bushel and July ended unchanged at US$2.65.

 

Ethanol futures settled mostly lower in thin trade with the May contract down 3.2 cents to US$2.19 per gallon. June ethanol fell 1 cent to US$2.16.