May 26, 2006

 

CBOT Corn Review on Thursday: Higher on fund buying,thin farmer selling

 

 

Corn futures settled modestly higher Thursday, supported by general commodity fund buying, thin farmer selling and a lack of selling interest ahead of the long weekend, a commission house analyst said.

 

July corn settled 3 3/4 cents higher at US$2.53 1/4 per bushel and December also added 3 3/4 cents to US$2.78.

 

There was little farmer selling, and the shorts were unwilling to add to their positions ahead of the weekend, he added.

 

Overall commodity fund buying was estimated at 5,400 contracts.

 

Corn's fundamentals are inherently bullish and the International Grains Council reminded the market of that fact Thursday, said John Kleist, of Kleist Ag Consulting in Arlingtonne Heights, Ill.

 

The IGC forecast 2006-07 U.S. corn exports at an 11-year high at 55 million metric tonnes, up 3 million from the previous marketing year.

 

Weekly export sales totaled a combined 1,175.2 million metric tonnes for the week ended May 18 and were termed solid by several analysts. This was the fourth week in a row that weekly exports were above the one-million-tonne level. Some 38,700 tonnes of this total was for delivery in the 2006-07 crop year.

 

Warmer temperatures forecast for the long holiday weekend also might have limited selling interest, a floor trader said.

 

In the U.S. corn belt west of the Mississippi River, mainly dry conditions are forecast with a few light sprinkles Friday and Saturday, DTN Meteorologix Weather said. Temperatures are expected to average above normal.

 

East of the Mississippi River, light to moderate sprinkles and only a few light showers are expected on Friday and Saturday in sections of the region. Temperatures are forecast above normal Saturday and Sunday, DTN Meteorologix Weather said.

 

On daily technical charts, July traded within the range established earlier in week between US$2.55 and US$2.48.

 

Buyers Thursday included ABN Amro, which bought 1,400 July and 300 December. Man Financial bought 1,100 July and 200 September, Fortis bought 1,000 July, Citigroup bought 500 July and UBS bought 600 September.

 

Sellers Thursday included JP Morgan, which sold 700 September and 500 December. Fimat sold 400 July, Shatkin sold 300 July and Calyon Financial sold 300 July.

 

In spread trading, JP Morgan bought 2,200 September-July and ADM bought 3,000 March-December.

 

Overall commodity fund selling was estimated at 5,400 contracts.

 

Oat futures settled sharply lower as fund long liquidation and technical selling pushed prices lower, a commercial connected analyst said. Oat growing conditions remain favorable, adding to the poor tonnee, he added.

 

The July contract gapped open lower on daily technical charts and fell 10 cents to US$1.82 1/2, its lowest level since late April. December settled 8 1/4 cents lower to US$1.82 1/4.

 

Ethanol futures settled mostly higher as the near term supply has yet to catch up to demand, which is causing the nearby months to increase, a floor trader said. June ethanol rose 3 cents to US$3.33 per gallon and July rose 8 cents to US$3.28.