May 24, 2006

 

CBOT Corn Review on Tuesday: Lower on funds, wheat, weather

 

 

Corn futures settled lower Tuesday, pressed by fund selling and weaker wheat futures, floor sources said.

 

July corn settled 1 1/2 cents lower at US$2.53 per bushel and December ended 1 1/4 cents lower at US$2.77 1/2.

 

Fund selling early in the session set the tonnee, and the negative trade in wheat for much of the session also added to the weakness, a floor analyst said.

 

CBOT July wheat futures fell 6 1/2 cents to US$4.19 3/4.

 

In addition, the weather is bearish for the near term, with scattered rains and warmer weather forecast for later this week, which isn't friendly for prices, the analyst added.

 

A jump in outside markets helped corn rally to near unchanged late in the session, but a lack of additional buying and a late selloff in wheat helped lead corn back to lower levels, a floor trader said.

 

Several traders noted that Monday's crop conditions were good with this week's weather expected to help the crop develop favorably.

 

In the U.S. corn belt west of the Mississippi River, scattered showers and thundershowers are forecast with amounts of 0.25-1.00 inch on Wednesday with some lingering showers on Thursday, DTN Meteorologix Weather said. Dry conditions with just a few light showers are expected Friday and Saturday.

 

Temperatures are forecast near to above normal in the period, DTN Meteorlogix said.

 

In the eastern U.S. corn belt, scattered showers and thunderstorms of 0.25-0.75 inch are forecast for Wednesday, with scattered showers of 0.10-0.50 inch and locally heavier possible on Thursday and Friday, DTN Meteorologix Weather said.

 

Temperatures are expected near to below normal in the first part of the period and near to above normal later in the period.

 

On daily technical charts, July settled below its 10-day moving average, but above its 20-, 40- and 100-day moving averages.

 

Buyers Tuesday included O'Connor, which bought 700 December, Fimat bought 2,000 December and 400 July, ABN Amro bought 500 March, FC Stonnee bought 400 July, JP Morgan bought 500 July and the Refco division of Man Financial bought 400 July and 100 September.

 

Sellers included Goldenberg-Hehmeyer, which sold 1,500 July, ABN Amro sold 1,200 July, Tenco sold 1,200 December, Citigroup sold 1,000 July, Iowa Grain sold 1,000 December and JP Morgan sold 500 July.

 

Commodity fund selling was estimated at 5,700 contracts.

 

Oat futures settled with modest gains as light buying interest helped support prices, with thin rolling out of July and into December supporting the deferred contracts, a floor trader said. The weakness in wheat futures, however, limited the gains, he added.

 

The July contract ended up 1/2 cent to US$1.96 1/2 per bushel and the December contract gained 2 1/2 cents to US$1.93 1/2.

 

Ethanol futures ended higher with the June contract finishing 6 cents higher at US$3.23 per gallon. The July contract also ended 6 cents higher at US$3.16.