June 6, 2006

 

CBOT Corn Review on Monday: Down on weather forecasts, fund selling

 

 

Corn settled moderately lower Monday, dragged down by midday weather forecasts, fund selling and profit-taking after Friday's advances, sources said.

 

July corn fell 6 1/2 cents to US$2.53 per bushel and December declined 6 1/4 cents to US$2.78 3/4.

 

It's all about the weather, a floor trader said. Some midday weather forecasts predict better moisture prospects for the middle to latter half of this week, and that pressured the corn, he added.

 

Fund selling added to the weak tonnee, with overall fund selling estimated at 4,600 contracts.

 

Ideas that this afternoon's weekly crop progress report would show steady to slightly improved crop conditions added to the negative tonnee. Floor analysts expect the U.S. corn crop to come in unchanged to one percentage point higher than last week's 70% rating in the good-to-excellent category.

 

Several traders noted that the metals and energy markets ended well off their earlier levels, removing some of the underlying support for the market.

 

One floor trader noted that Friday's rally was in anticipation of weather forecasts supportive for prices and "once that didn't happen," the market retreated.

 

The U.S. Department of Agriculture reported export inspections totaled 44.493 million bushels for the week ended June 1, just below the 45 million-50 million bushels expected and beneath the 50.483 million inspected in the previous week.

 

Scattered to widely scattered thundershowers are forecast for the western U.S. Midwest on Monday and Tuesday, with amounts of .25-1.00 inch expected, DTN Meteorologix Weather said. Mainly dry conditions are expected Wednesday. Temperatures are forecast to average near to above normal in the period.

 

In the eastern U.S. Midwest, scattered to widely scattered thundershowers are expected in the region Tuesday and Wednesday after mainly dry conditions Monday. Amounts are expected between .25-.75 inch. Temperatures are forecast to average above normal Tuesday and near normal Wednesday, DTN Meteorologix Weather said.

 

Buyers Monday included JP Morgan, which bought 500 July; Tenco bought 200 September; and Man Financial bought 200 December and 100 September.

 

Sellers Monday included O'Connor, which sold 1,000 July; Rand sold 1,000 September and 200 July; Fimat sold 700 December and 500 July; Calyon sold 500 July; and Tenco sold 500 July and 200 September.

 

In spread trading, UBS bought 2,000 March-September.

 

Oat futures settled mixed as early light fund buying dissipated and futures traded within modest ranges for the rest of the session, sources said.

 

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

 

Ethanol futures ended slightly higher in light trading. The July contract gained 1 cent to US$3.39 per gallon.

 

On Monday afternoon, the USDA is scheduled to release the weekly crop progress report at 3 p.m. CDT.