June 13, 2007

 

CBOT Corn Review on Tuesday: Modestly lower on profit-taking

 

 

Chicago Board of Trade corn futures ended modestly lower Tuesday, undermined by profit-taking after the good gains recorded Monday and some midday weather forecasts that increased the amount of rain possible for the western U.S. Midwest later this week, an analyst said.

 

July corn fell 2 1/2 cents to US$3.93 1/2 per bushel, September also fell 2 1/2 cents to US$4.02 1/2, and December slipped 1/2 cent to US$4.05 1/2.

 

There is too much uncertainty in the market, so some people consolidated their positions, an analyst said.

 

The continued favorable crop ratings in the crop progress report released Monday also limited buying interest as conditions remained stronger than some analysts expected, a trader said.

 

The U.S. Department of Agriculture reported that 77% of the U.S. corn crop was in good-to-excellent condition, down one percentage point from the previous week.

 

Corn also came under light pressure from wheat-corn spreading with the bullish world wheat situation pushing wheat futures higher, the trader said.

 

It was a back-and-forth type of trade in corn, said Mike Zuzolo, chief analyst at Risk Management Commodities. Mostly technical profit-taking was seen with the market not trading the fundamentals, he said.

 

In addition, there are questions about weather forecasts for next week, limiting trade, he added.

 

Spread trading was active as participants rolled out of July and into the deferred months, as the Goldman roll continued, a trader said.

 

In the big picture, corn is stuck between weather and supplies and until the market gets a better handle on production, it will be hard-pressed to go down, said Luke Moretti, an electronic trader at Cytrade Financial.

 

Corn's price direction Wednesday will be determined by the weather outlook overnight, a trader said.

 

Commodity fund selling was estimated at 3,000 contracts

 

In open auction trading, Man Financial bought 1,000 July, and UBS sold 1,000 December.

 

On daily technical charts, July remained above most major moving averages with the exception of the 100-day.

 

Oat futures ended unchanged to lower as participants rolled out of July and into the deferred contracts in light activity, ignoring the gains in wheat, a floor analyst said.

 

July oats settled 3 1/2 cents lower to US$2.91 per bushel and December ended unchanged at US$2.89 1/2.

 

Ethanol futures settled unchanged to lower in light trade. July ethanol ended flat at US$1.926 per gallon and August fell 6.5 cents to US$1.945.