June 27, 2006

 

CBOT Corn Review on Monday: Weather forecasts pressure market

 

 

Corn futures at the Chicago Board of Trade finished lower Monday, as continued weather forecasts favorable to crop development pressured prices, sources said.

 

July corn declined 5 1/4 cents to US$2.23 per bushel and December fell 6 1/4 cents to US$2.49.

 

The weather is bearish, as no heat is expected in the near-term, a floor trader said. In addition, some areas that needed rain over the weekend in Iowa got some, he added.

 

"It's pretty cut and dried - the market is weather-driven," said Vic Lespinasse of AG Edwards & Sons. The weather continues to be bearish for prices, he added.

 

Moderate fund and technical selling added pressure, floor sources noted. Fund selling was estimated at 10,300 contracts.

 

The midday maps revealed no significant changes to the near-term forecast, with the market removing additional weather premium, a commission house analyst said.

 

On technical charts, December settled at its lowest levels since mid-to-late January, gapping open to the downside on daily technical charts and finishing beneath most major moving averages. December corn's 14-day relative strength index now stands at 32.06.

 

Export inspections were 41.353 million bushels, near the low end of the range of analyst estimates, and beneath the previous week's 47.387 million. A few traders noted disappointment over the number.

 

Buyers Monday included ABN Amro, which bought 500 December. Man Financial bought 300 September and 500 December, Rand bought 300 July and 500 December, Tenco bought 500 December, and Calyon bought 500 September.

 

Sellers Monday included Fimat, which sold 2,000 December. ADM sold 1,000 December, JP Morgan sold 600 July and 1,000 December, RJ O'Brien sold 700 December and 400 July and Calyon sold 500 December.

 

Oat futures finished lower except for the spot month July contract, which ended higher on light fund buying, a floor trader said. A firm cash market was also a supportive factor in the nearby gains with the new crop contracts lower on light selling, he added.

 

July oats ended 1 1/2 cents higher at US$2.03 1/2 per bushel and December fell 3 3/4 cents to US$1.92 3/4.

 

Ethanol futures settled mixed in light trading. The July contract fell 15 cents to US$3.68 per gallon with the August contract unchanged at US$3.08.

 

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

 

Traders and analyst expect a 1-to-2-percentage-point increase in corn's good-to-excellent rating. Last week, 68% of the U.S. corn crop was rated in good-excellent-condition.