May 23, 2006

 

CBOT Corn Review on Monday: Recovers to end higher, led by wheat

 

 

Corn futures settled modestly higher and near session highs Monday, recovering from earlier losses as strong gains in wheat futures helped corn recover, floor sources said.

 

The July contract ended 1 3/4 cents higher at US$2.54 1/2 per bushel and the December contract finished up 1 1/2 cents at US$2.78 3/4.

 

Fund buying in wheat and light fund buying in corn helped trim early losses, said Vic Lespinasse of AG Edwards & Sons. The lack of follow-through selling after the opening also set back early losses, he added.

 

Follow-through selling from weaker prices overnight and following Friday's declines pressed futures early. However, the inability of the July contract to fill a downside gap on daily technical charts provided some support, a commission house analyst said.

 

On daily charts, July gapped opened lower, slipping into a gap created by Friday's losses and the high reached May 11.

 

Crude oil and precious metals recovered from earlier losses, which helped provide some support, but it was all wheat, a commercial-connected analyst added.

 

KCBT July wheat futures settled 13 1/4 cents higher at US$5.17 1/2.

 

Talk of hotter-than-normal weather forecast for this weekend was also cited as a reason for the support, though a floor trader noted that it was "only May."

 

In the western U.S. Midwest, dry conditions or just a few light showers are forecast over the next two days, DTN Meteorologix Weather said. Scattered showers or thunderstorms are expected Wednesday with amounts of .25-1.00 inch expected. Temperatures in the region are forecast near to above normal Tuesday and above normal Wednesday through Sunday, DTN Meteorologix Weather said.

 

In the eastern U.S. Midwest, dry conditions the first part of the week are forecast to give way to scattered showers and thunderstorms on Wednesday and Thursday with totals of .25-1.00 inch expected.

 

Temperatures are forecast near to below normal through Wednesday; near to above normal Wednesday through Friday; and above normal over the weekend, DTN Meteorologix Weather said.

 

The U.S. Department of Agriculture released weekly export inspections during the session and corn inspections were a better-than-expected 53.503 million bushels for the week ended May 18, above the 44.518 million bushels the previous week.

 

On daily technical charts, July settled above its major moving averages, with its 14-day Relative Strength Index at 56.16.

 

Buyers Monday included Calyon Financial, which bought 1,000 July; Fimat bought 800 July and 400 September; Rand bought 1,500 December; UBS bought 1,000 July; JP Morgan bought 500 July and 200 December; and Man Financial bought 400 July.

 

Sellers Monday included FC Stonnee, which sold 800 December; JP Morgan sold 700 September and 500 July; Citigroup sold 500 July and 200 September; and Man Financial sold 300 July.

 

Commodity fund buying was estimated at 1,800 contracts.

 

Oat futures finished mostly lower, but above earlier levels as spillover strength from wheat helped trim earlier losses set on commission house and light fund selling, floor sources said. The July contract fell 2 1/4 cents to US$1.96 per bushel and the December contract slipped 1 3/4 cents to US$1.91.

 

Ethanol futures settled modestly higher in light trade. The June contract gained 3 cents to 3.17 per gallon and the July contract added 4 1/2 cents at US$3.10.

 

The USDA is scheduled to release the weekly crop progress report at 3 p.m. CDT on Monday.