June 14, 2007

 

CBOT Corn Review on Wednesday: Higher on fund buying, weather forecasts

 

 

Chicago Board of Trade corn futures settled higher Wednesday, posting good-sized gains after early price weakness failed to take root, an analyst said.

 

July corn rallied 11 cents to US$4.04 1/2 per bushel, September jumped 10 cents to US$4.12 1/2, and December gained 9 1/2 cents to US$4.15.

 

"When the market didn't break hard after opening lower selling interest dissipated and the market began to firm," said Ross Carstens, a broker/analyst with Commodity Services in Des Moines, Iowa.

 

Drier midday weather forecasts added to the gains as funds and technical buying added to the upside, Carstens said.

 

Fund buying was estimated at 7,000 contracts.

 

"It's a weather market," and until there are good rains, it will be hard to press the market lower, a trader said.

 

Most midday weather forecasts predicted drier weather for next week, reducing the amount of rain forecast in overnight outlooks, an analyst said.

 

The market won't break on just the weather forecasts, the analyst added.

 

July rallied over its 100-day moving average on daily technical charts, and settled over it for the first time since March 23.

 

Sharply higher wheat values played a role in the rally, a floor trader said. July wheat settled at US$5.89 1/2, up 24 1/2 cents, the highest level for any front-month contract since 1996.

 

Corn's initial price direction Thursday will be determined by the overnight weather forecasts, an analyst said.

 

In open auction trading, Fortis bought 2,500 July, and UBS sold 500 December.

 

In options trading, UBS bought 2,000 December US$3.70 puts and sold 2,000 December US$4.70 calls.

 

Oat futures settled higher, bolstered by spillover from stronger corn and wheat futures in light trade, a floor trader said.

 

July oats gained 2 cents to US$2.93 per bushel and December rose 1 1/2 cents to US$2.91.

 

Ethanol futures ended higher in very light activity. July ethanol settled 4.8 cents higher at US$1.974 per gallon and August, which did not trade, gained 3 cents to US$1.975.

 

On Thursday, the U.S. Department of Agriculture is scheduled to release the weekly export sales report at 8:30 a.m. EDT (1230 GMT). Analysts expect sales between 300,000-700,000 metric tonnes for the week ended June 7.