May 2, 2007

 

CBOT Corn Review on Tuesday: Settles higher on poor planting pace, weather

  

 

Chicago Board of Trade corn futures ended higher Tuesday, boosted by speculative buying after Monday's crop progress report revealed lower than expected corn plantings, traders said.

 

May corn gained 9 1/2 cents to US$3.67 1/2 per bushel, July settled 10 cents higher at US$3.77 1/2, and December rallied 14 cents to US$3.78 1/2.

 

The feature was the slow planting pace of the U.S. corn crop, as the weak seeding pace has the market concerned, said Brian Hoops, president of Midwest Market Solutions in Yankton, S.D.

 

The U.S. Department of Agriculture reported Monday that corn planting was 23% complete for the week ended April 29, well below the 48% seeded last year and the five-year average of 42%.

 

"This is the smallest percentage of corn planted for this time of year since 1999," Hoops said. It looks like farmers will need plant 65% of the crop after May 1 and there is a good chance that a large amount might be planted closer to the May 10-15 time frame, leading to concerns about the potential for yield losses, Hoops said.

 

Mid-day weather forecasts indicating the potential for an increased chance for rain in parts of the U.S. Midwest also added support and trimmed selling interest, a commission house analyst said.

 

The mid-day forecast predicts the possibility of wetter than previously expected weather this weekend in the western U.S. Midwest with amounts in excess of 1.50 inches, said meteorological service T-storm Weather. Western sections of Iowa could receive up to 1.25 inches of rain, the service said.

 

Technical and speculative fund buying were also noted, the analyst said.

 

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

 

In open auction trading, buyers included JP Morgan, which bought 1,000 July, and Fimat, which bought 600 December.

 

Sellers included Fimat which sold 5,000 July.

 

Commodity fund buying was estimated at 5,000 contracts.

 

In options trading, ADM bought 1,000 June US$3.70 puts.

 

Oat futures finished higher, shrugging off early weakness based on fund selling as spillover support from the gains in the other row crops and light fund buying late in the session boosted prices, a commission house analyst said.

 

May oats settled 1 1/2 cents higher to US$2.62 1/2 per bushel and July rose 2 3/4 cents to US$2.69 3/4.

 

Ethanol futures settled mixed with May ending 5.3 cents higher to 2.215 per gallon while June ethanol declined 1.5 cents to US$2.155.