June 22, 2007

 

CBOT Corn Review on Thursday: Settles lower as weather forecasts weigh in

 

 

Chicago Board of Trade corn futures ended moderately lower on Thursday, dragged down by speculative and technical liquidation as some midday forecasts indicated increased chances for rain in parts of the U.S. Midwest and Delta in the near-term, analysts said.

 

July corn settled 9 1/4 cents lower at US$3.85 per bushel, September fell 9 1/2 cents to US$3.94 3/4, and December settled 7 1/4 cents lower to US$3.99.

 

"It is an emotional weather situation, and participants are very skittish after the market's recent sharp rally," said Jack Scoville, vice president at Price Futures Group.

 

Technical selling also pressured corn with December falling below several support levels, he said.

 

Sharply lower soybean prices also exerted downward pressure on corn, Scoville added.

 

November soybean fell 22 3/4 cents to US$8.51 3/4 per bushel.

 

"Corn prices have rallied sharply recently on dry weather concerns, so any forecast calling for rain negatively impacts the market," a trader said.

 

Long liquidation pressured prices with much of the weakness coming from bearish midday weather forecasts, an analyst said.

 

Some midday forecasts added rain for the Delta region of the U.S. and increased chances for additional rain in parts of the U.S. Midwest.

 

Export sales were better than expected but did not provide support for the market Thursday, Scoville said.

 

The U.S. Department of Agriculture reported that corn weekly exports were 988,400 metric tonnes for the week ended June 14, above the 500,000-850,000 tonnes forecast by analysts.

 

News of a sale of 120,000 metric tonnes of U.S. corn to unknown destinations for delivery in 2006-07 was also ignored.

 

The market will be waiting on the updated overnight weather forecasts for Friday's price direction, a commission house analyst said.

 

In open auction trading, JP Morgan bought 1,000 July, Man Financial bought 600 December and ADM Investor Services sold 400 July.

 

In options trading, JP Morgan bought 2,000 July US$4.00 calls, UBS sold 5,000 December US$4.50 calls, and ADM bought 2,500 December US$4.00 puts.

 

Commodity fund selling was estimated at 4,000 contracts.

 

On daily technical charts, December settled below its 10-day moving average and at its lowest level since June 8.

 

Oat futures settled lower as continued fund-rolling out of spot month July and into December undermined prices with outright selling of July by commodity funds also adding pressure, an analyst said. In addition, technical selling added to the weakness, a trader said.

 

July oats fell 4 cents to US$2.71 per bushel while December declined 4 3/4 cents to US$2.78 1/4.

 

Ethanol futures ended modestly higher in thin trade. July ethanol settled 1.7 cents higher at US$1.969 per gallon and August rose 0.003 cents to US$1.943.