May 1, 2007

 

CBOT Corn Review on Monday: Settles lower on dry forecast, Speculative sales

 

 

Chicago Board of Trade corn futures on Monday ended lower and near the middle of their daytime trading ranges in choppy activity.

 

May corn settled 6 1/4 cents lower to US$3.58 per bushel, July also fell 6 1/4 cents to US$3.67 1/2 and December settled 3 cents lower to US$3.64 1/2.

 

The corn market "continues to run in place and has been doing so for the past month," said Don Roose, president of US Commodities in West Des Moines, Iowa.

 

The trade expects drier weather this week, which will allow an open planting window, and corn prices have moved into the bottom end of the recent range, Roose said.

 

A lack of additional selling after midsession helped prices stage a modest recovery, a commission house analyst said.

 

Corn trimmed its early declines near midday as people evened up ahead of the crop progress report, unwilling to keep short positions ahead of the report, the analyst said.

 

However, late selling thought to be month-end fund liquidation helped undermine futures near the close. There was some long liquidation ahead of month end by commodity funds which contributed to the late weakness, a floor trader said.

 

Commodity fund selling was estimated at 8,000 contracts. Price direction on Tuesday depends on the crop progress report as well as the overnight weather forecasts, the floor trader said.

 

DTN Meteorologix Weather predicts a generally dry and warm weather pattern across the U.S. Midwest this week, favorable for corn planting. Temperatures will turn cooler than weekend readings but are expected normal to above normal in the region.

 

On daily technical charts, July finished below most major moving averages.

 

In open auction trading, buyers included JP Morgan, which bought 500 July, and Rand Financial, which bought 500 December.

 

Sellers included JP Morgan, which sold 1,600 December, and Tenco, which sold 800 December.

 

In options trading, Tenco 1,000 December US$3.70 calls and sold 1,000 December US$3.30 puts and 1,000 December US$3.20 puts.

 

Oat futures settled lower as commission house selling and spillover weakness from lower wheat and corn prices weighed on oat futures, a floor trader says. Fund activity was largely absent from the market, he added.

 

May oats fell 4 cents to US$2.61 per bushel and July declined 2 1/2 cents to US$2.67.

 

Ethanol futures ended lower with the exception of spot month May, which gained .001 cent to US$2.162. June ethanol fell 1 cent to US$2.17.

 

Monday afternoon the U.S. Department of Agriculture is scheduled to release weekly crop progress report for the week ending April 29 at 4 p.m. EDT (2000 GMT). Analysts expect corn planting 27%-35% complete.