July 6, 2006

 

CBOT Corn Review on Wednesday: Lower on favorable weather forecasts

 

 

Corn futures settled lower Wednesday as weather forecasts favorable to crop development weighed on prices, sources said.

 

July corn fell 3 3/4 cents to US$2.39 1/2 per bushel, and December lost 4 cents to US$2.64 1/2.

 

The weather forecasts at this moment are bearish for prices, a floor trader sad. The midday forecast predicts moderate temperatures and additional rains in the six- to 10-day period, a commission house analyst said.

 

There is no heat in the forecast, and what rain the crop does receive can go a long way without hot temperatures, said Vic Lespinasse of AG Edwards.

 

The market overdid it a bit to the upside on Monday and is taking out a little of the premium, the commission house analyst added.

 

The market had little reaction to a decline in weekly crop conditions released Monday afternoon by the U.S. Department of Agriculture. The USDA reported that 68% of the U.S. corn crop was rated in good-to-excellent condition as of July 2, down 3 percentage points from the previous week.

 

In Iowa, the largest U.S. corn producing state, 77% of the crop was rated in good-to-excellent condition, down 1 percentage point, with Illinois down 2 percentage points at 70% good-to-excellent condition.

 

Light technical selling also added to the weakness, with December trading on either side of some of its major moving averages, the commission house analyst said.

 

Buyers on Wednesday included ADM, which bought 8,000 December. Fimat bought 1,000 December, JP Morgan bought 1,000 December, and FC Stonnee bought 800 December and 300 September.

 

Sellers Wednesday included ADM, which sold 5,000 December. JP Morgan sold 1,000 December, Calyon Financial sold 800 December, O'Connor sold 500 December and UBS sold 500 December.

 

Overall commodity fund buying was estimated at 1,000 contracts.

 

Oat futures ended mixed, with July drawing support from a firm cash market and with the deferred months little changed as light fund buying was offset by commercial related selling, an oat analyst said. July did set a new life of contract high earlier in the session.

 

July oats gained 2 1/2 cents to US$2.17 per bushel, with the December contract unchanged at US$1.99.

 

Ethanol futures settled lower in light trade. The August contract fell 8.7 cents to US$2.82 per gallon, and the September contract dropped 14.2 cents to US$2.50.

 

On Thursday, the USDA is scheduled to release weekly export inspections data, which were delayed to due computer problems. The weekly export sales report is scheduled for release Friday, one day later than usual due to the holiday.