June 24, 2006

 

CBOT Corn Review on Friday: Lower on speculators selling, weather outlook

 

 

Corn futures settled lower Friday, making new lows near the close as speculative selling kept the market below Thursday's settlement prices for most of the session, sources said.

 

July corn settled 2 1/4 cents lower at US$2.28 1/4 per bushel and the December contract declined 1 3/4 cents to US$2.55 1/4.

 

Light speculative and fund selling kept the market on the defensive for most of the day. The fund selling was light but it didn't need to be heavy as activity in the market was slow, a floor source said.

 

It appeared that no one wanted to add any weather premium to the market ahead of the weekend, a commission house analyst noted. The speculative traders are apparently less threatened by the weekend weather than earlier in the year, he noted.

 

The weather forecasts continues to predict scattered rains and moderate temperatures, a floor trader said. The market didn't break as the midday forecast got a little drier in the western U.S. so it's not an ideal outlook, but it doesn't present a threat to the crop, he added.

 

On technical charts, July traded at its lowest level since March 20, with December remaining below its 200-day moving average.

 

Buyers Friday included Goldenberg-Hehmeyer, which bought 1,000 December, Tenco bought 1,000 September, the USA Trading division of Man Financial bought 400 July, Fimat bought 300 December, and FC Stonnee bought 300 July.

 

Sellers included Citigroup, which sold 3,000 September, Tenco sold 300 December and 200 July, RJ O'Brien sold 300 December and ADM sold 200 July.

 

Overall commodity fund selling was estimated at 2,500 contracts.

 

Oat futures settled mostly lower with July higher and the deferred months under pressure as light fund buying of July and selling of December weighed on the back months, a floor trader said. December was also under pressure technically as it filled an upside gap to the downside at lower levels, he added.

 

July oats settled 3 cents higher at US$2.02 per bushel and December declined 3 3/4 cents to US$1.96 1/2.

 

Ethanol futures ended lower in modest trading. The July contract declined 10 cents to US$3.83 per gallon with the August contract falling 15 cents to US$3.08.

 

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

 

On Monday, the U.S. Department of Agriculture is scheduled to release the weekly export inspections report at 10:00 a.m. CDT and the weekly crop progress report at 3:00 p.m. CDT (2000 GMT).