May 18, 2007

 

CBOT Corn Review on Thursday: Settles lower on weather, speculative sales

 

 

Chicago Board of Trade corn futures ended lower Thursday, pressured by the bearish influence of favorable weather outlooks for developing crops and for the completion of spring plantings in the Midwest, analysts said.

 

July corn ended 3 cents lower at US$3.73, and December finished 7 cents lower at US$3.70 1/2.

 

The weather outlooks for the Midwest are non-threatening at this point, leaving bullish traders with little to hang their hats on, a CBOT floor analyst said.

 

The unwinding of commercial bear spreads were featured, as tightening old crop supplies served as underpinning features for nearby contracts. Strong weekly export sales data added support to old crop contracts as well.

 

Nevertheless, a defensive tone engulfed the market throughout the day on speculative selling, with spillover weakness from wheat and the continued modification of the corn/soybean price ratio underlying themes for the market, analysts added.

 

The DTN Meteorlogix forecast calls for dry weather across the Midwest through this coming weekend. Some chilly temperatures have developed, but a killing frost is not expected. This weather pattern is favorable for field work and planting in all but the hardest-hit flood areas of the western Midwest. In addition, temperatures will be variable; generally mild, and favorable for early crop growth.

 

Next week, showers and thunderstorms will develop Monday in the western Midwest, and will spread eastward across the entire corn and soybean belt as the week progresses. Rainfall next week will be normal to above normal in the western Midwest, and near normal to below normal in the eastern Midwest, Meteorlogix reports.

 

The U.S. Department of Agriculture reported weekly corn export sales were 1.862 million metric tonnes for the week ended May 10. Included in the total were net sales of 1.514 million metric tonnes for the 2006-07 marketing year. Analysts had forecast sales between 1,100,000 and 1,500,000 metric tonnes.

 

In pit trades, JP Morgan bought 500 July, 600 September, and 200 December, man Financial and Rosenthal each bought 400 December. JP Morgan sold 300 September and 1,200 December, Man Financial sold 500 December and Rosenthal sold 600 July. Speculative fund selling was estimated between 4,000 and 5,000 contracts.

 

CBOT oat futures ended higher amid technical support and a lack of sellers, a floor trader said. The market has upside technical momentum after recent gains, he added. July oats rose 2 cents to US$2.61 1/2 per bushel, and Dec oats settled 1/2 cent higher at US$2.55.

 

Ethanol futures finished in positive territory. June closed up US$0.007 at US$2.140 per gallon, and July ended up US$0.015 at US$2.090.