June 26, 2007

 

CBOT Corn Review on Monday: Skids lower on weather, technical selling

 

 

Chicago Board of Trade corn futures settled lower Monday, making new lows for the session in some contracts on the close as technical liquidation and midday weather forecasts conducive to crop development pressured prices, analysts said.

 

July corn fell 9 3/4 cents lower at US$3.57 3/4 per bushel, Sep also lost 9 3/4 cents to US$3.67, and Dec declined 7 1/2 cents to US$3.74.

 

The corn market endured a lot of technical damage last week and it saw additional follow-through technical selling Monday, said Jason Britt, an analyst at Central States Commodities.

 

Most midday forecasts were in agreement, predicting less heat than in earlier outlooks and additional rain, a commission house analyst said. A slow-moving cold front could deposit up to 1 inch of rain parts of Illinois, Indiana and Ohio in the near-term, said meteorological firm Cropcast in a note to clients.

 

Commodity fund selling dragged down corn with fund selling estimated at 7,000 contracts.

 

Talk of more corn acres and less soybean acres ahead of the U.S. Department of Agriculture's updated acreage and stocks report scheduled for Friday added pressure, Britt said.

 

A poor corn export inspections report was disappointing as the recent break in prices apparently didn't attract much end-user buying interest, said Britt.

 

The USDA reported that corn inspected for export totaled 29.174 million bushels for the week ended June 21, under analyst expectations.

 

Ideas that Monday afternoon's crop progress report would reflect steady to slightly higher ratings also limited upside interest, a floor trader said.

 

Tuesday's price direction will depend on position squaring, if any, ahead of the report Friday and the weather forecasts, a trader says.

 

On daily technical charts, July settled below its major moving averages, and traded down to its lowest level since May 15. December remained above its 200-day moving average but finished at its lowest level since May 29.

 

In open auction trading, JP Morgan bought 1,000 July and 1,000 December, Iowa Grain sold 700 December and UBS sold 800 December.

 

In options trading, JP Morgan sold 1,500 December US$3.50 puts, UBS bought 1,000 September US$3.80 puts and sold 1,000 September US$3.30 puts and 1,000 September US$4.30 calls.

 

Oat futures settled with modest losses as commodity funds continued their recent selling of July-December while commercial firms took the other side, an analyst said. Spillover weakness from corn also weighed on oats, the analyst said.

 

July oats fell 3 cents to US$2.61 per bushel and December declined 4 1/2 cents to US$2.69.

 

Ethanol futures ended modestly lower in light activity. July ethanol settled 1.5 cents lower at US$1.96 per gallon and August also fell 1.5 cents to US$1.935.

 

Monday afternoon the U.S. Department of Agriculture is scheduled to release the weekly crop progress report at 4:00 p.m. EDT (2000 GMT). Analysts expect crop ratings unchanged to two percentage points higher for the week ended June 24.