May 9, 2007

 

CBOT Corn Review on Tuesday: Sharply lower on increased planting pace

 

 

Chicago Board of Trade corn futures ended at sharply lower levels Tuesday, pressured by better-than-expected planting progress along with speculative and technical selling, analysts said.

 

May corn settled 15 3/4 cents lower at US$3.53 3/4 per bushel, July ended down 15 1/2 cents at US$3.63 1/2, and December fell 16 3/4 cents to US$3.66 1/2.

 

"It has been extremely wet in the western U.S. corn belt and the planting progress report took the market by surprise," said Brian Hoops, president of Midwest Market Solutions in Yanktonne, S.D.

 

The U.S. Department of Agriculture reported corn planting at 53% complete as of May 6, well above most analyst expectations.

 

In Illinois, 72% of the crop has been planted compared to the five-year average of 73%, while in Minnesota, 70% of the crop has been seeded, slightly above the five-year average of 69%.

 

Speculative fund selling added to the losses, contributing to a decline of over 30 cents since Thursday's high of US$3.96 1/2 basis July.

 

Technically, the market looks weak and is trading at the bottom of its recent range after breaking out to the upside just last week, a commission house analyst said.

 

Despite the declines, market direction will remain tied to the weather, the commission house analyst said.

 

On daily open auction technical charts, July gapped open lower and trade down to its 200-day moving average but remained above it.

 

In open auction trading, buyers included FC Stonnee, which bought 800 July and Fortis, which bought 700 December.

 

Iowa Grain sold 1,200 July and Man Financial sold 1,000 December.

 

In options trading, Tenco bought 2,000 December US$3.80 calls and sold 2,000 December US$3.40 puts and 2,000 December US$3.35 puts.

 

Oat futures settled sharply lower in the nearby months as spillover losses from the other grains and technical weakness pushed prices lower, a floor trader said.

 

July oats settled 11 1/2 cents lower at US$2.55 1/2 per bushel while December retreated 4 cents to US$2.48.

 

Ethanol futures ended mostly higher in light activity. June ethanol settled .005 cent higher at 2.10 per gallon and July finished unchanged at US$2.065.