May 5, 2007

 

CBOT Corn Review on Friday: Settles higher on position squaring

 

 

Chicago Board of Trade corn futures finished modestly higher Friday, as light buying interest near the close, thought to be position squaring helped support prices in the absence of fresh news, analysts said.

 

May corn settled 1 1/2 cents higher to US$3.81 1/4 per bushel, July rose 1 1/2 cents to US$3.90 3/4, and December gained 3 1/4 cents to US$3.90 1/2.

 

The lack of speculative interest and moderating near-term weather outlooks kept prices within relatively narrow trading ranges, analysts said.

 

"The weather forecasts Friday were slightly drier than earlier outlooks and that kept speculative fund buying out of the market," said Brian Hoops, president of Midwest Market Solutions in Yanktonne, S.D.

 

Corn had a poor technical close Thursday, and that also limited buying by speculators, he said.

 

Bear market spreading kept the nearby months on the defensive for much of the session, a commission house analyst said. However, light buying interest near the close thought to be position squaring ahead of the weekend helped the nearby months to finish with thin gains, the commission house analyst added.

 

The market was in a "holding pattern" Friday waiting on weekend weather and Monday's crop progress reports for further price direction and as a result participants were hesitant to add new positions, a floor trader said.

 

The eastern U.S. Midwest corn belt should be mostly dry through mid-week and possibly later in the week after shower activity passes through the region on Friday and Saturday, said Mike Tannura, a meteorologist with T-storm weather. Illinois, Indiana and Ohio should remain mostly dry in the period with slightly warmer than average temperatures expected.

 

The western U.S. Midwest is still forecast to receive up to 0.25-1.00 inch of rain over the next several days, with locally heavier amounts possible, Tannura said. Monday's price direction will depend on the weekend weather and its perceived impact on planting progress as well as the weather forecast Sunday night, the trader said.

 

On daily open auction technical charts, July settled above its 10-, 20-and 40-day moving averages in an inside day, between the highs and lows established in Thursday's session.

 

In open auction trading, buyers included Tenco, which bought 500 December, while Rand sold 500 December. In options trading, Tenco bought 2,000 December US$3.90 calls and sold 4,000 December US$3.50 puts.

 

Oat futures finished lower in quiet trading as light speculative selling kept prices on the defensive, a floor trader said. Oat planting in Canada continues to proceed favorably, limiting buying interest, the trader said.

 

July oats settled 3 1/2 cents lower to US$2.68 per bushel and December fell 2 cents to US$2.49 1/2.

 

Ethanol futures settled lower in thin trading with June ending 4.2 cents lower at US$2.106 per gallon and July down 2.8 cents to 2.08.

 

Friday afternoon the Commodity Futures Trading Commission is scheduled to release the commitment of traders report for the period ending May 1. Monday afternoon the U.S. Department of Agriculture is scheduled to release weekly crop progress report for the week ending May 6 at 4:00 p.m. EDT (2000 GMT).