May 19, 2007

 

CBOT Corn Review on Friday: Lower; backpedals on position squaring

 

 

Chicago Board of Trade corn futures ended lower across the board Friday, backpedaling into the weekend on end-of-the week position squaring.

 

July corn ended 1 3/4-cents lower at US$3.71 1/4, and December finished 4 cents lower at US$3.66 1/2.

 

The market was subjected to two-sided activity, with old/new crop spreads featured over the course of the day, analysts said.

 

The inverse spread relationship between nearby and deferred month futures widened Friday, with tightening old crop inventories and favorable crop conditions creating a divergence in price direction, analysts added.

 

A quiet news front kept attention on weather and technical factors, with traders taking a cautious approach, looking ahead to next week's crop ratings and weather outlooks, traders said.

 

U.S. Department of Agriculture will release its first crop ratings for the 2007 U.S. corn crop Monday. Analysts expect the report to show corn in a range of 62% to 68% good to excellent.

 

Meanwhile, the DTN Meteorlogix weather forecast, calls for dry, windy and warm weather across all the main U.S. crop areas through the coming weekend. This pattern is a good one for planting and favorable for crop emergence in row crop areas.

 

Several chances for rainfall will move across the central U.S. during the next seven days. Rain of up to one inch is in store for the western Midwest, and up to three-quarters of an inch in the eastern Midwest. The rain will be welcome in the eastern Midwest, where several areas are still below average on rainfall since the first of May. Showers will bring additional topsoil moisture for early growth of corn and soybeans, Meteorlogix forecasts.

 

In pit trades, buyers and sellers were lightly scattered among various commission houses. JP Morgan bought 300 September and sold 500 July. Speculative funds bought an estimated 1,500 lots.

 

CBOT oat futures rose on fund buying and technical support, floor traders said. Funds bought an estimated 500 July. July oats climbed 4 3/4 cents to US$2.66 1/4, and Dec ended up 2 cents at US$2.57.

 

Ethanol futures finished mixed. June ethanol ended up US$0.033 at US$2.173 per gallon, while July fell US$0.005 to US$2.085.