June 30, 2006

 

CBOT Corn Review on Thursday: Up on position evening before USDA report

 

 

Corn futures finished higher Thursday as market participants positioned themselves ahead of Friday's USDA planting and stocks reports, sources said.

 

July corn settled 2 1/2 cents higher to US$2.28 1/2 per bushel and December rose 2 1/2 cents to US$2.54 1/2.

 

Friday is also the first notice day for July deliveries, it's the end of the month and end of the quarter, and people evened up some of their positions ahead of all the information due out, a floor analyst noted.

 

An overnight weather forecast that was termed "supportive to prices" by several floor sources also provided early strength as did stronger than expected weekly corn export sales, a commission house analyst said.

 

The U.S. Department of Agriculture reported weekly corn export sales were 2,027.6 million metric tonnes for the week ended June 22. This was the 8th week out of the last 9 that sales were above 1 million metric tonnes. This week's total included 673,800 tonnes for delivery in 2006-07. Analysts expected sales between 1.2 million to 1.75 million metric tonnes.

 

Gains were limited however, as midday forecasts predicting the possibility of additional rain in the near term with heat forecast for the U.S. Midwest in the longer term was confusing and helped limit the gains, a floor analyst said,

 

Trading activity was quiet with the market looking ahead to Friday's reports for direction, a floor source added.

 

The USDA is scheduled to release its June acreage and quarterly stocks reports at 7:30 a.m. CDT (1230 GMT) Friday.

 

The average of 20 analysts surveyed by Dow Jones expect U.S. corn acreage at 79.797 million acres, above the 78.019 forecast by the USDA in March, but below the 81.759 million planted in 2005.

 

The average of 13 analysts surveyed expect quarterly U.S. corn stocks at 4.362 billion bushels, as compared to the 4.321 billion in June 2005.

 

Friday is first notice day for the July future with traders and analysts expecting delivering between 1,000 and 2,000 contracts.

 

Buyers Thursday included Fimat, which bought 1,200 December and 400 July, ABN Amro bought 1,000 December, JP Morgan bought 500 December and 500 July, RJ O'Brien bought 700 December and Bunge bought 500 December.

 

Sellers Thursday included Prudential Financial, which sold 2,300 December, Calyon sold 3,000 December, ABN Amro sold 1,500 December, Man Financial sold 500 December and 400 July and RJ O'Brien sold 500 July.

 

Overall commodity fund buying was estimated at 1,500 contracts.

 

In options trading Prudential Financial bought 8,000 December 2007 US$3.60 calls.

 

Oat futures finished mostly lower with a strong cash market supporting the spot month July, while technical selling pressured the deferred contracts, a commission house analyst said.

 

July oats gained 4 1/4 cents to US$2.11 per bushel, a new life of contract higher, while the December contract fell 6 1/2 cents to US$1.86 3/4.

 

Ethanol futures were mixed in light trading. The July contract slipped 2 cents to US$3.37 per gallon with the August contract up 1 cent to US$2.90.