May 17, 2007

CBOT Corn Review on Wednesday: Ends mixed in choppy, two-sided trade

 

 

Chicago Board of Trade corn futures ended mixed Wednesday, after struggling to find lasting direction over the course of the day.

 

July corn ended 4 1/2 cents higher at US$3.76, and December finished one cent lower at US$3.77 1/2.

 

The market was torn between weakness in wheat and spillover strength from soybeans, a CBOT commission broker said.

 

Activity was choppy, with prices hovering within a range as lingering concerns for 2007 crop potential attracted light speculative fund buying, analysts said. The market remains sensitive to potential crop threats as the market has a small margin of error for production due a strong demand base, analysts added.

 

Uncertainty surrounding talk of La Nina, and the U.S. Department of Agriculture's factoring in lower yields in its latest supply and demand report added to the fray.

 

Favorable planting conditions and beneficial rains moving across dry areas of the eastern Midwest applied pressure, traders said.

 

Reports of fresh export demand ahead of the open and expectations for a strong weekly export sales report Thursday, managed to keep a floor under prices, a trader said.

 

Thursday, the USDA is scheduled to release its weekly export sales report at 8:30 a.m. EDT. Analysts surveyed by Dow Jones Newswires anticipate commitments in the 1,100,000 to 1,500,000 metric tonne range.

 

The DTN Meteorlogix forecast said rainfall of up to six-tenths of an inch is moving across the eastern Midwest, and will end Thursday. These showers are welcome, but won't be enough to make up moisture deficits that have developed in this sector of the U.S. Corn Belt.

 

In the next five days, generally dry weather is in store for the entire Midwest, which will further enhance field work progress and assist in the recovery efforts in areas which had flooding during the first 10 days of May, Meteorlogix forecasts. The end of this week will features some very cool temperatures for the season. Low temperatures Thursday and Friday morning will sink into the mid to upper 30s Fahrenheit in the upper Midwest through the immediate Great Lakes area. Some light frost is possible; however, temperatures don't appear to be cold enough to cause significant damage to emerged crops, Meteorlogix reports.

 

In pit trades, buyers and sellers were widely scattered among various commission houses with speculative funds estimated net buyers of 1,500 lots.

 

CBOT oat futures rose with support from gains in the corn market, a floor trader said. Fund buying of July and December contracts inspired some technical strength, he added. There was commercial selling of March, the trader noted. July oats ended up 2 cents at US$2.59 1/2 per bushel, and December oats settled 2 3/4 cents higher at US$2.54 1/2.

 

Ethanol futures finished weaker. June closed down US$0.022 at US$2.133 per gallon, and July slid US$0.038 to US$2.075.