June 15, 2007

 

CBOT Corn Review on Thursday: Settles higher on wheat, weather

 

 

Chicago Board of Trade corn futures ended higher Thursday in choppy trading, but were unable to maintain good-sized gains set earlier in the session on surging wheat futures and speculative buying, analysts said.

 

July corn settled 5 cents higher to US$4.09 1/2 per bushel, September also rose 5 cents to US$4.17 1/2, and December ended 2 1/2 cents higher to US$4.17 1/2.

 

CBOT July wheat at one point traded as high as US$5.19 1/2, 29 cents higher on the day a new contract high and fresh 11-year high before fading on profit taking, traders said.

 

Wheat and corn were both feeding off each other, said Shawn McCambridge, senior grain analyst at Prudential Financial. The corn market was also underpinned by weather forecasts which continue to predict the western half of the U.S. Midwest wet and the eastern half remaining dry in the near term, he said.

 

Producers know what a bull market can do for them price-wise so they were not aggressive sellers of cash corn, also supportive to the market, McCambridge said.

 

Midday weather forecasts failed to make any significant changes from earlier outlooks, and the market remained supported by the potential impact of dry weather on the crop, a trader said.

 

Activity was choppy with corn slipping to trade at lower levels in early afternoon trade as wheat fell from its highs and profit taking pressured prices, the trader said. However, a rebound in nearby wheat values to strong gains and bull spreading helped corn rebound, the trader added.

 

Wheat was supporting corn all day, a commission house analyst said.

 

News of routine export sales had no impact on the market, and a sale of 115,000 metric tonnes of U.S. corn to unknown destinations for delivery in 2006-07 also had little impact, the analyst said.

 

The U.S. Department of Agriculture reported weekly corn exports were 586,700 metric tonnes for the week ended June 7, within analyst expectations. Included in the total was 54,800 metric tonnes for delivery in 2007-08.

 

The weather forecasts and wheat will provide direction for corn Friday, an analyst said.

 

In open auction trading, Fortis bought 1,500 December, JP Morgan bought 1,000 December and sold 1,000 December, while Man Financial sold 800 December.

 

Commodity fund buying was estimated at 6,500 contracts.

 

In options trading, Tenco bought 1,000 July US$3.90 puts.

 

On daily technical charts, July remained above its major moving averages and its 14-day relative strength index was 63.92.

 

Oat futures ended mixed in light trade as funds rolled out of nearby positions and into deferred contracts ignoring the gains in wheat, a commission house analyst said.

 

July oats fell 2 1/2 cents to US$2.90 1/2 per bushel and December rose 1 cent to US$2.92.

 

Ethanol futures settled higher in modest activity. July ethanol settled 7.5 cents higher at US$2.049 per gallon and August, rose 4.5 cents to US$2.02.