May 31, 2006

 

CBOT Corn Review on Tuesday: Ends slightly higher, early gains fade

 

 

Corn futures ended with thin gains Tuesday but below levels reached earlier in the session as buying interest early in the day wasn't sustained, a floor source said.

 

July corn ended up 1/2 cent at US$2.54 1/2 per bushel and December gained 3/4 cent to US$2.79 3/4.

 

Light spillover support from the overnight session and from stronger outside markets supported futures early, a floor analyst said.

 

A stronger-than-expected opening in wheat futures also provided support, he added.

 

However, the lack of additional buying interest and weather forecasts favorable for crop development limited the upside, a floor source said.

 

A sell-off in wheat futures, pushing prices lower on the day in that market, also kept some corn buyers on the sidelines, the source added.

 

Export inspections were released during the session and came in within analyst expectations. The U.S. Department of Agriculture reported that 49.655 million bushels of corn had been inspected, within the 45 million-50 million bushels expected by analysts.

 

In the U.S. corn belt west of the Mississippi River, rainfall of up to one inch is forecast Tuesday into Wednesday, DTN Meteorologix Weather said, with the heavier amounts in eastern Iowa, northern Missouri and southeastern Nebraska.

 

Areas east of the Mississippi River are expected to receive showers and thunderstorms Tuesday and Wednesday as well, with rainfall up to one inch, DTN Meteorologix Weather said. All areas of the U.S. Midwest are expected to be mainly dry during the last half of the week.

 

Temperatures are expected to average near to above normal in western regions Thursday and Friday and near to above normal Thursday-Sunday in the eastern region of the U.S. corn belt, DTN Meteorologix Weather said.

 

Buyers Tuesday included UBS, which bought 1,500 July; RJ O'Brien bought 500 July and 100 September; ADM bought 200 July; Citigroup bought 200 September; and Fimat bought 200 December

 

Sellers Tuesday included UBS, which sold 600 December; Calyon sold 300 July; Citigroup sold 300 September; and JP Morgan sold 300 July and 200 September.

 

Overall, commodity fund buying was estimated at 2,300 contracts.

 

On daily technical charts, July traded an outside day, above the high and below the low set Friday. July finished below its 10-day moving average.

 

Oat futures ended unchanged to slightly lower as early strength based on spillover from wheat and corn and talk of wet conditions in Saskatchewan gave way to light selling interest near the close, an oat analyst said. The July contract ended unchanged at US$1.80 1/4 per bushel and the December contract settled 1 1/2 cents lower at US$1.80 1/2.

 

Ethanol futures settled higher in thin trade, a floor source said. The June contract rose 9 cents to US$3.51 per gallon and the July contract gained 4 cents to US$3.42.

 

On Tuesday afternoon, at 3 p.m. CDT, the USDA is scheduled to release the weekly crop progress report as of May 28.

 

Last week, 66% of the crop was rated in good-to-excellent condition.