May 3, 2007

 

CBOT Corn Review on Wednesday: Ends higher; supported by weather forecasts

 

 

Chicago Board of Trade corn futures settled higher Wednesday, supported by light follow through buying from the overnight session and some midday forecasts that predicted wetter weather late next week and into the following week, a floor trader said.

 

May corn rose 4 1/2 cents to US$3.72 per bushel, July also settled 4 1/2 cents higher at US$3.82, and December gained 1 3/4 cents to US$3.80 1/4.

 

The weather is the focus of the market and the forecast at midday predicted wetter weather and corn reacted to the news, said Vic Lespinasse of AG Edwards & Sons.

 

Although producers are planting corn in many areas of the U.S. Midwest, any additional rain could make corn planting slower than earlier expected, adding to concerns that corn might be seeded after its optimum planting time, Lespinasse said.

 

University research has shown that corn planted after mid-May does not yield as well as corn planted before that date.

 

Gains were limited as some weather forecasts did not agree with the midday outlooks, a floor analyst said.

 

Although the midday weather forecast predicts a wet weather pattern next week continuing through the weekend and into the following week, there are many variables that could change that outlook, said meteorological service T-storm weather in an e-mail to clients.

 

Fund buying was also supportive, but overall trading was "dull", the analyst said.

 

Commodity fund buying was estimated at 5,000 contracts.

 

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

 

In open auction trading, buyers included JP Morgan, which bought 600 July and 500 December and Tenco, which bought 500 December.

 

In options trading, FC Stonnee sold 1,000 June US$3.80 calls and 500 September US$4.00 calls.

 

Oat futures finished mostly lower as light speculative selling and fund selling in the deferred months weighed on the market, a floor trader said.

 

May oats settled 1/2 cent higher to US$2.63 per bushel while July fell 3/4 cent to US$2.69.

 

Ethanol futures ended mixed with June settling 1 cent lower to 2.145 while July ethanol rose 1.5 cents to US$2.105.

 

Thursday, the U.S. Department of Agriculture is scheduled to release the weekly export sales report for the week ended April 26 at 8:30 a.m. EDT (1230 GMT). Analysts expect corn sales between 800,000 and 1.1 million metric tonnes.