May 8, 2007

 

CBOT Corn Review on Monday: Down as traders expect good planting pace

 

 

Chicago Board of Trade corn futures settled lower Monday on ideas that this afternoon's U.S. crop conditions report will show that farmers made good overall progress planting corn last week, analysts said.

 

May corn settled 11 3/4 cents lower to US$3.69 1/2 per bushel, July also ended down 11 1/2 cents US$3.79, and December fell 7 1/4 cents to US$3.83 1/4.

 

The perception is that producers will get the crop planted on time and that led to profit-taking, a commission house analyst said.

 

The market is expecting that planting progress will be closer to the upper end of the range of expectations, a floor trader said. Analysts expect corn planting between 40%-55% complete for the week ended May 6, well above the 23% seeded the previous week.

 

The midday forecast called for dry weather, unchanged from earlier forecasts and that added to the poor tonnee, said Vic Lespinasse of AG Edwards & Sons.

 

Generally dry weather is expected next week and through the weekend of May 19, said T-storm Weather. Although conditions are forecast to be generally dry a high amount of humidity is expected in the western corn belt and northern plans due to evaporation, the service said in an e-mail to clients.

 

Fund and technical selling pressured prices with corn-wheat spread activity adding to the poor tonnee, Lespinasse said.

 

Fund selling was estimated at 10,000 contracts.

 

Corn export inspections were weaker than expected but had little impact, a floor trader said.

 

The U.S. Department of Agriculture reported that corn inspected for export totaled 33.6 million bushels for the week ended May 3, below the 37 million to 42 million expected by analysts.

 

Tuesday's market direction depends on the planting pace in the crop progress report, a floor analyst said.

 

On daily open auction technical charts, July settled below several major moving averages, but remained above its 20-day average.

 

In open auction trading, buyers included JP Morgan, which bought 1,000 July and 1,000 December, while Tenco sold 1,000 December.

 

In options trading, Man Financial bought 2,000 July US$4.30 calls, and sold 2,000 July US$4.60 calls and 2,000 July US$3.50 puts.

 

Oat futures ended mixed in very light trade, stuck between the weakness in corn and the steady tonnee in wheat, a commission house analyst said.

 

July oats settled 1 cent lower to US$2.67 per bushel while December gained 2 1/2 cents to US$2.52.

 

Ethanol futures finished slightly lower in thin trading with June settling 1.1 cents lower to US$2.095 per gallon and July down 1.5 cents to US$2.065.

 

On Monday afternoon, the USDA is scheduled to release the weekly crop progress report for the week ended May 6 at 4 p.m. EDT (2000 GMT).