May 9, 2006

 

CBOT Corn Review on Monday: Down on weather, funds, technical selling

 

 

Corn futures at the CBOT finished modestly lower, undermined by bearish weather, lower outside markets, technical and fund selling, sources said. The July contract settled 3 1/2 cents lower at US$2.37 per bushel and the December contract fell 2 3/4 cents to US$2.61 1/4.

 

The market had two strikes against it early, said Vic Lespinasse of AG Edwards & Sons. The weather is bearish and the outside markets were lower, he said.

 

In addition, the funds were good sellers and the market experienced some technical selling as well, he added.

 

Commodity fund selling was estimated at 10,700 contracts.

 

The crop is planted, a commission house analyst said, with the exception of some of the fringe areas, and the weather forecast is conducive to good crop development, he added.

 

Light showers are forecast over the next several days in southern and eastern areas of the western U.S. Midwest, with amounts between 0.25-0.75 inch expected, DTN Meteorologix Weather said. Dry weather with only a little light rain is expected on Thursday and Friday.

 

In the eastern U.S. Midwest, scattered showers and thundershowers, with amounts of 0.25-1.00 inch and locally heavier are forecast for Tuesday and Wednesday, DTN Meteorologix Weather said.

 

Temperatures are forecast to turn cooler in the western U.S. Midwest on Tuesday and Wednesday, with temperatures in the eastern U.S. Midwest near to above normal Tuesday and near to below normal Wednesday, DTN Meteorologix Weather said.

 

Technical selling added to the losses, a commission house analyst agreed, with July corn gapping open lower and settling beneath its major moving averages except the 200-day, he said. The 14-day relative strength index for July corn now stands at 39.2. July corn traded down to its lowest level since March 30.

 

Export inspections were 33.581 million bushels for the week ended May 4, within the range of 33 million to 38 million bushels estimated by analysts.

 

Buyers Monday included Fimat, which bought 1,000 July, Tenco bought 1,000 July, Merrill Lynch bought 400 July, Citigroup bought 300 July, ABN Amro bought 300 July, FC Stonnee bought 400 July as part of a Wheat-corn spread ad Bunge bought 100 May.

 

Sellers Monday included Calyon Financial, which sold 2,000 December, Iowa Grain sold 2,000 July, Man Financial sold 1,500 July, Citigroup sold 1,000 July, Fimat sold 1,000 July, JP Morgan sold 800 December and 500 July, Rand sold 1,000 July, ADM sold 400 July and the Refco division of Man Financial sold 500 July.

 

Oat futures ended lower on thin fund selling in light trade, floor sources said. The July contract fell 3 3/4 cents to US$1.86 3/4 per bushel and the December declined 3 1/2 cents to US$1.79 1/2

 

Ethanol futures finished higher in modest activity. The June contract rose 3 cents to US$2.75 per gallon and the July contract gained 4 cents to US$2.65.

 

Monday afternoon, the U.S. Department of Agriculture is scheduled to release the weekly crop progress report at 3:00 p.m. CDT.