June 2, 2006

 

CBOT Corn Review on Thursday: Higher; bounces back from early losses

 

 

Chicago Board of Trade corn futures finished higher Thursday, bouncing back from session lows set on the opening as commercial, fund and options related buying helped futures recover, sources said.

 

July corn gained 3 1/4 cents to US$2.54 1/2 per bushel and December rose 3 3/4 cents to US$2.80 3/4.

 

The market came under pressure right on the opening, but it couldn't break and commercial buying came in and helped support prices, a commission house analyst said.

 

In addition, a good amount of call options buying also helped underpin futures, a commercial connected trader said.

 

Light commodity fund buying added to the positive tonnee, with several floor sources noting a rebound in outside markets helped to underpin values.

 

One trader noted that although the weather is "perfect now" some forecasters are calling for a ridge to develop later in the month, bringing hot and dry weather to the U.S. Midwest, which sparked some buying concerns, he noted.

 

Following late-weekend rain in the eastern portion of the U.S. Midwest, conditions are forecast to turn drier from the upcoming weekend into the first part of next week, DTN Meteorologix Weather said. Temperatures are expected to trend to mostly above-normal values in the Midwest with readings in the 80s degrees Fahrenheit in much of the region.

 

Rainfall for the first full week of June is forecast to be near-to-below-normal in the U.S. Midwest, DTN Meteorologix said.

 

On daily technical charts, July filled on the downside an upside price gap created on May 12 and traded an outside day with a lower low and a higher high than the previous session.

 

Buyers on Thursday included Goldenberg-Hehmeyer, which bought 2,000 July. JP Morgan bought 1,500 July, ABN Amro bought 1,200 July, Citigroup bought 1,000 July, Man Financial bought 1,000 July, and Fimat bought 1,000 July, 1,000 December and 500 September.

 

Sellers Thursday included Calyon Financial, which sold 2,000 July. ABN Amro sold 1,200 July, UBS sold 1,500 July, the Refco division of Man Financial sold 800 July and JP Morgan sold 600 July.

 

Overall commodity fund buying was estimated at 4,000 contracts.

 

In spread trading ABN Amro bought 1,500 July-December.

 

Oat futures finished mostly higher as light fund- and commercial-related buying in July helped underpin prices, an oat trader said.

 

The July contract settled 4 3/4 cents higher at US$1.86 3/4 per bushel and the December contract gained 2 1/4 cents to US$1.88 3/4.

 

Ethanol futures finished lower after trading sharply higher earlier in the session. The June contract slipped 1 cent to US$3.62 per gallon, while July fell 8 cents to US$3.37.

 

On Friday, the U.S. Department of Agriculture is scheduled to release the weekly export sales report for the week ended May 25. Analysts expect sales between 800,000 and 1.050 million metric tonnes. The report was delayed a day because of Memorial Day.

 

The Commodity Futures Trading Commission is scheduled to release the weekly Commitments of Traders Report after the close of trading Friday afternoon.