June 20, 2006

 

CBOT Corn Review on Monday: Lower on weather outlook

 

 

Corn futures at the Chicago Board of Trade settled lower Monday as favorable weekend weather in much of the U.S. Midwest and near-term forecasts predicting weather conducive to crop development pressured prices, sources said.

 

July corn fell 5 3/4 cents to US$2.29 3/4 per bushel and December declined 5 1/2 cents US$2.55 3/4.

 

The weather over the weekend was as forecast last week and is predicted to be non-threatening over the near term as well, a floor trader said.

 

The midday weather update had little impact as the forecast continues to see mostly favorable weather for crops in the near term, said Joel Burgio, a meteorologist with DTN Meteorologix Weather.

 

At the start of the day it was the weather, but technical and fund selling kept the market on the defensive, a commission house analyst said.

 

Overall fund selling was estimated at 5,000 contracts.

 

News that Japan had purchased over 203,000 metric tonnes of corn and that 116,000 tonnes had been sold to unknown destinations was termed "routine" business by a floor trader and had little impact.

 

The U.S. Department of Agriculture reported weekly export inspections of 47.061 million bushels. This was in line with expectations and also had no impact, the trader added.

 

The market remained focused on the weather early in the session with liquidation and technical selling adding to the weak tonnee, a commission house analyst said.

 

On technical charts, July gapped open lower and settled at its lowest level since mid-March. July corn's 14-day relative strength index stands at 34.76.

 

Buyers Monday included the Refco division of Man Financial, which bought 6,000 December. Goldenberg-Hehmeyer bought 1,000 July and 1,000 December. JP Morgan bought 800 July and 1,000 December, and Fimat bought 500 July and 500 December.

 

Sellers Monday included Man Financial, which sold 3,000 September and 2,500 December. UBS sold 2,000 September, ADM sold 1,000 December, Goldenberg-Hehmeyer sold 1,000 July and RJ O'Brien sold 200 July and 1,000 December.

 

Oat futures settled fractionally lower as market participants rolled out of July and into December as first notice day approaches, a floor source said. The funds were buying December and selling July, he added.

 

July oats settled 3/4 cent lower at US$1.95 3/4 and December oats slipped 1 cent to US$1.94 1/2.

 

Ethanol futures ended unchanged to higher in modest activity. The July contract settled 14 cents higher at US$4.08 per gallon and August ethanol ended unchanged at US$3.30.

 

Monday afternoon the USDA is scheduled to release the crop progress report at 3:00 CDT (2000 GMT). Last week 70% of the U.S. corn crop was in good-to-excellent condition.