June 6, 2007

 

CBOT Corn Review on Tuesday: Lower; midday weather forecasts weigh

 

 

Chicago Board of Trade corn futures ended lower Tuesday unable to hold early gains based on spillover buying from stronger wheat and soybean futures as wetter midday weather forecasts turned the market lower, analysts said.

 

July corn declined 3 1/2 cents to US$3.80 1/4 per bushel, September fell 2 1/2 cents to US$3.85 3/4, and December settled 1/4 cent lower to US$3.82 3/4.

 

Supportive longer term weather outlooks and spillover from higher soybean and wheat futures provided early support for prices, a commission house analyst said. However a retreat from the highs in both wheat and soybeans before mid-day helped corn slip from modest gains, he added.

 

Corn was a follower of the other markets Tuesday and when wheat and soybeans fell from their highs, corn turned mixed, the commission house analyst said.

 

The corn market was dominated by the weather Tuesday, said Bill Nelson, associate vice-president at AG Edwards & Sons. Overnight weather forecasts were supportive with a high-pressure ridge expected to develop near mid-month limiting rainfall in parts of the U.S. Midwest. However, midday forecasts increased the chances of rain, reducing the impact of the ridge and corn retreated, Nelson said.

 

The lack of other supportive news also limited buying interest a trader said.

 

Monday's crop progress report noted the corn crop in much of the U.S. is in good condition and that acted as a cap on the market, the trader added.

 

The U.S. Department of Agriculture reported that 78% of the US corn crop was in good-to-excellent condition, unchanged from the previous week. Ninety-four percent of the crop has emerged compared to the five-year average of 88%.

 

The corn market is influenced by the weather and the overnight forecast will dictate price direction Wednesday, a trader said.

 

On daily technical charts, July settled at its lowest level in a week but remained above most of its major moving averages, with the exception of the 100-day moving average.

 

In open auction trades, Penson GHCO sold 1,000 December.

 

In options trading, Fimat sold 3,000 July US$3.80 calls and 2,000 US$3.60 calls, and sold 1,000 each of the July US$3.70, US$3.90 US$4.00, US$4.10 and US$4.20 calls.

 

Oat futures settled unchanged to modestly higher as speculative buying in the nearby months thought to be fund related helped support prices, an analyst said.

 

July oats rose 1 3/4 cents to US$2.92 3/4 per bushel and December settled up 1/2 cent to US$2.83 1/2.

 

Ethanol futures ended lower in thin trade. June ethanol fell 2.3 cents to US$2.12 per gallon and July declined 2.9 cents to US$2.011.