June 29, 2007

 

CBOT Corn Review on Thursday: End mixed; nearby months finish lower

 

 

Chicago Board of Trade corn futures settled mixed Thursday with the nearby months ending near session lows and the distant deferred months higher on bear-market spreading ahead of Friday's acreage and stocks reports.

 

July corn settled 4 1/4 cents lower at US$3.39 1/2 a bushel, September fell 3 3/4 cents to US$3.50, and December declined 3 3/4 cents to US$3.58 1/4.

 

"After a 70-cent decline in prices, people nursed their wounds or cashed out of their positions," said Bob Anderson, an analyst with Commodity Services.

 

Speculative liquidation of the nearby months continued, with near-term weather forecasts remaining favorable for crop development, a commission house analyst said.

 

The market is telling participants that the acreage in Friday's report will be larger than expected, the analyst said.

 

The U.S. Department of Agriculture is scheduled to release the reports at 8:30 a.m. EDT (1230 GMT) Friday.

 

Planted corn acreage for 2007 is estimated at 90.585 million acres, according to a Dow Jones Newswires survey of 20 analysts. This compares to the 90.454 million acres the USDA estimated in March and sharply higher than the 78.327 million planted in 2006.

 

Quarterly corn stocks as of June 1 are projected at 3.467 billion bushels, according to a survey of analysts, lower than the 4.362 billion in June, 2006.

 

The focus is on the weather, the acreage and the technical picture and all of them are bearish, a trader said.

 

On technical charts July remained below its major moving averages and traded at its lowest level since late October. December traded to its lowest level since early May.

 

Export sales were released before day-session activity began and were near the high end of analyst expectations but had little impact, a floor trader said.

 

The USDA reported weekly corn export sales totaled 988,900 metric tonnes for the week ended June 21, the USDA reported Thursday, within the 550,000-1.1 million metric tonnes expected by analysts.

 

Price direction on Friday is dependent on the acreage report, analysts said.

 

In open auction trading, Prudential bought 500 December and Kottke bought 800 December.

 

In options trading, Fortis bought 1,000 August US$3.60 calls and sold 1,000 December 2008 US$3.50 puts. Fortis also bought 1,000 September US$4.70 calls and sold 2,000 September US$4.90 calls.

 

Oat futures settled higher, recovering from moderate losses set early in the session on fund selling as commercial buying of the July-Sep and July-Dec spreads rallied the market, an analyst said. July oats gained 12 1/2 cents to US$2.73 a bushel and December rose 3 cents to US$2.69.

 

Ethanol futures settled higher in modest trade. July ethanol rose 3 cents to US$1.95 a gallon and August ended up .005 cent to US$1.90.