June 23, 2006

 

CBOT Corn Review on Thursday: Lower; weather keeps lid on market

 

 

Chicago Board of Trade corn futures finished lower Thursday, undermined by continued good growing weather in much of the U.S. Midwest with midday forecasts predicting the pattern will continue over the next several days, sources said.

 

July declined 2 1/4 cents to US$2.30 1/2 per bushel and December fell 2 cents to US$2.57. The short-term midday models remain wet in much of the Midwest for the near term, so there's no need to put a weather premium back into the market, a commission house analyst said.

 

News of better-than-expected weekly export sales at 1.816 million metric tonnes were termed supportive but were unable to help the market generate any traction, sources said.

 

Analysts expected sales between 1.1-1.6 million metric tonnes.

 

Modest fund selling also added to the negative tonnee, floor sources said.

 

It rained overnight in Iowa where they needed it and the forecast is a negative that sums it up, a commission house trader said.

 

The midday weather maps suggest the U.S. Midwest will have continue to have some shower activity in the near term, said Mike Palmerino, a meteorologist with DTN Meteorologix Weather. Most of the rain will be in the southern corn belt Friday with amounts between .30 and 1.50 inches, he said.

 

Showers will redevelop in the western corn belt Saturday with amounts of .10-.50 inch and locally heavier. Indications are those showers will continue to move eastward Sunday with scattered light showers expected, he said.

 

On technical charts, December remained above its 200-day moving average of US$2.55 3/4.

 

Buyers on Thursday included JP Morgan, which bought 600 July. Kottke bought 600 December, RJ O'Brien bought 400 July, and UBS bought 400 December.

 

Sellers Thursday included Tenco, which sold 800 July and 500 December. Rand Financial sold 1,300 December, Citigroup sold 300 July and 300 December and Man Financial sold 400 December and 200 July.

 

ADM bought 5,000 December-September spreads.

 

Overall commodity fund selling was estimated at 3,500 contracts.

 

Oat futures finished lower as earlier fund buying was more than offset by hedge related selling, a floor trader said. The fund buying lifted several months to new contract highs for the second straight day.

 

Spillover weakness from declines in soft red wheat futures added to the losses, the trader added.

 

July oats ended 3 cents lower at US$1.99 per bushel and December fell 2 1/2 cents to US$2.00 1/4.

 

Ethanol futures settled lower in light activity. The July contract fell 15 cents to US$3.93 per gallon with the August contract also ending 15 cents lower at US$3.23.

 

Friday afternoon the Commodity Futures Trading Commission is scheduled to release the commitment of traders report for the period ending June 20.