June 23, 2007

 

CBOT Corn Review on Friday: Settles down sharply on weather, technicals

 

 

Chicago Board of Trade corn futures finished sharply lower Friday, pressured by rain overnight in much of the U.S. Midwest and forecasts for additional rain this weekend as well as heavy technical selling, analysts said.

 

July corn settled 17 1/2 cents lower at US$3.67 1/2 per bushel, September dropped 18 cents to US$3.76 3/4, and December fell 17 1/2 cents to US$3.81 1/2.

 

The rain pressured the market and the losses were exaggerated by technical selling with July opening up under its major moving averages, an analyst said.

 

The weather was the key and the wet weather brought in technical and fund selling, a commission house analyst said.

 

Midday weather forecasts were little changed compared to earlier outlooks and failed to provide any reason to support prices, the commission house analyst said. Fund selling pressured the market as long position holders were on the defensive, a floor trader said.

 

Fund selling was estimated at 15,000 contracts. Losses in equity markets might have also influenced selling in grain futures, the trader added.

 

Steep losses in soybeans also exerted a negative influence on prices with November soybeans falling 21 cents to US$8.30 3/4.

 

For the week, July corn fell 51 1/2 cents from last Friday's close and December declined 42 3/4 cents.

 

Corn's price direction Monday will depend upon the rainfall received over the weekend, the overnight forecasts on Sunday and what the funds decide to do, the commission house analyst said.

 

In open auction trading, FC Stone bought 1,200 July, and UBS bought 1,200 July. ADM Investor Services sold 1,800 July and 600 December and Fimat sold 1,000 December.

 

In options trading, Man Financial bought 2,000 December US$3.80 puts and sold 2,000 December US$3.30 puts and sold 2,000 December US$4.40 calls.

 

On daily technical charts, July settled below its major moving averages, while December remained above only its 200-day moving average. July ended at its lowest level since late May.

 

Oat futures ended lower as fund selling in December and technical weakness weighed on prices with spillover weakness from the rest of the floor also limiting the upside, an analyst said.

 

July oats declined 7 cents to US$2.64 per bushel and December fell 4 3/4 cents to US$2.73 1/2.

 

Ethanol futures settled slightly higher in very light trade. July ethanol settled .006 cent higher at US$1.975 per gallon and August rose .007 cent to US$1.95.

 

Monday, the U.S. Department of Agriculture is scheduled to release the weekly export sales report at 11:00 a.m. (1500 GMT) EDT and the weekly crop progress report at 4:00 p.m. EDT (2000 GMT).