June 1, 2007

 

CBOT Corn Review on Thursday: Settles higher on Weather, speculative buying

 

 

Chicago Board of Trade corn futures rose Thursday, continuing its recent rally as forecasts for drier weather late next week in much of the U.S. Midwest corn belt supported prices, analysts said.

 

July corn gained 8 cents to US$3.90 1/4 per bushel and December corn, rose 3 1/2 cents to US$3.84 3/4. July corn futures have rallied over 20 cents this week.

 

"The market is concerned about the weather in early June," said Don Roose, president of U.S. Commodities in West Des Moines, Iowa.

 

Some private weather forecasts indicate the potential for a high pressure ridge to develop in the south-central U.S. late next week, blocking moisture to most of the corn belt, Roose said.

 

Although corn planting is nearly finished in the U.S., dry weather in the eastern U.S. corn belt is a concern with the crop needing moisture to develop ahead of the summer growing season. In Ohio, less than 40% of the topsoil moisture is adequate.

 

Fund buying and technical buying also supported prices with fund buying estimated at 7,000 contracts.

 

Conflicting mid-day weather forecasts trimmed some of the rally, but corn-soybean spreading underpinned corn and weighed on soybeans, said Mike Hagen, an electronic trader with A & A Trading.

 

The weather continues to be the focus of the market and the forecast will dictate price direction, an analyst said.

 

On daily technical charts, July ended above its major moving averages, expect for the 100-day and traded to its highest level since early May.

 

Iowa Grain bought 1,000 July and UBS bought 700 July. FC Stone sold 1,000 July and JP Morgan sold 1,000 July.

 

In options trading, RJ O'Brien bought 1,200 December US$3.50 puts.

 

Oat futures finished higher, bolstered by spread trading and the positive tone in wheat and corn, a floor trader said. Participants were actively rolling out of July and into September.

 

July oats rose 3 1/2 cents to US$2.81 per bushel, September gained 5 cents to US$2.83 1/2 and December gained 4 cents to US$2.73.

 

Ethanol futures settled lower in light trading. June ethanol fell 5 cents to US$2.19 per gallon and July declined 4.5 cents to US$2.05.

 

Friday, the U.S. Department of Agriculture is scheduled to release the weekly export sales report at 8:30 a.m. EDT (1230 GMT). Analysts expect sales between 700,000 and 1.4 million metric tons for the week ended May 24.

 

Friday afternoon, the Commodity Futures Trading Commission is scheduled to release the commitment of traders' report for the period ending May 29.