June 3, 2006

 

CBOT Corn Review on Friday: Up on soy spillover, speculative buying

 

 

Corn finished at its highest levels in two weeks Friday at the Chicago Board of Trade, as a combination of factors pushed prices up, as session highs were set on the close, sources said.

 

July corn rose 5 cents to US$2.59 1/2 per bushel and December gained 4 1/4 cents to US$2.85.

 

"Everything came together today," said Vic Lespinasse of AG Edwards & Sons. Corn drew support from the strong gains in soybeans and soybean meal. In addition, it's the weekend and nobody wants to go home short, nobody wants to sell it right now, he said.

 

"This is the time of the year when the market puts weather premium into the market, not take it out," he added.

 

July soybeans rallied 22 1/4 cents to US$6.09 and July soybean meal jumped US$10.20 to US$185.40.

 

Several traders noted the some private forecasters are predicting hot and dry weather for late next week in the Midwest, which should also provide support. Over the next month, the weather is crucial to the crop, an analyst said.

 

Commodity fund buying also added tonnee, with overall fund buying estimated at 4,000 contracts.

 

In the western part of the U.S. Midwest, mostly dry conditions are forecast Friday and Saturday with a chance for a few light thundershowers on Sunday favoring the northern part, DTN Meteorologix Weather said. Temperatures are expected to average above normal with highs mostly in the 80 degrees Fahrenheit to possibly low 90's.

 

In the eastern sector of the Midwest, showers may linger Friday in the southeast and far east areas, DTN Meteorologix Weather said. Mainly dry conditions with only a few light showers are predicted for the weekend. Temperatures are expected to average near to below normal.

 

On daily technical charts, July filled on the upside a downside price gap created on May 19, and finished at its highest level since that day.

 

Buyers Friday included Man Financial, which bought 2,000 December; JP Morgan, which bought 1,500 December and 800 July; Fimat, which bought 1,000 July, 1,000 September and 1,000 December; and O'Connor, which bought 1,000 September and 800 December.

 

Sellers Friday included Goldenberg-Hehmeyer which sold 3,000 July; ABN Amro, which sold 1,500 July and 500 December 2008; Man Financial, which sold 1,000 July; RJ O'Brien, which sold 2,000 July; and ADM, which sold 900 July.

 

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

 

In spread trading ABN Amro bought 2,000 July-December.

 

Oat futures settled higher as steady fund buying in the nearby months supported prices, an oat local said.

 

The July contract gained 4 3/4 cents to US$1.91 1/2 per bushel and the December contract rose 2 cents to US$1.90 3/4.

 

Ethanol futures finished modestly higher in light trading. The June contract rose 6 cents to US$3.68 per gallon, while the July gained 1 cent to US$3.38.

 

The Commodity Futures Trading Commission is scheduled to release the weekly commitment of traders report after the close of trading Friday afternoon.

 

On Monday, the weekly export inspections are scheduled to be released at 10:00 a.m. CDT and the weekly crop progress report is scheduled for release at 3:00 p.m.