July 6, 2007

 

CBOT Corn Review on Thursday: Settle higher on overdone ideas, strong wheat

 

 

Chicago Board of Trade corn futures settled higher Thursday, boosted by ideas that recent losses were overdone and due for a correction and spillover from higher wheat prices, analysts said.

 

July corn gained 4 cents to US$3.24 a bushel, September rose 4 cents to US$3.32 1/2 and December gained 4 1/2 cents to US$3.42 1/2.

 

Corn has gone from a market leader back to its role of a follower of soybeans and wheat, said Dale Durchholz, an analyst with AgriVisior.

 

Overnight weather forecasts called for warmer, drier conditions in some parts of the U.S. Midwest, but some midday weather outlooks called for the potential of an increased chance of rain early next week limiting the upside, a commission house analyst said.

 

Sharply higher wheat futures helped support corn values throughout the session, a trader said. September wheat rallied 21 cents to US$6.04 a bushel.

 

Light speculative buying also added support with commodity fund buying estimated at 4,000 contracts but activity was modest as some traders extended their holiday, the commission house analyst said.

 

Price direction depends on the weather forecasts as well as the direction of wheat and soybeans, a trader said.

 

On day session technical charts electronically traded December traded an "inside day" within the price range established in Tuesday's session. December's 14-day relative strength index is 29.73.

 

In open auction trading, Fimat bought 1,300 December and ADM Investor Services sold 2,500 July.

 

In options trading, Man Financial bought 2,500 December US$3.00 puts and Fortis bought 1,000 September US$3.90 calls and 1,000 September US$4.10 calls. Fortis sold 1,000 September US$4.00 calls and 2,000 September US$4.20 calls.

 

Oat futures settled mixed, with spot July lower but the deferred months modestly higher on spillover support from sharply higher wheat values, a trader said. The funds were on both sides of the market in December in thin trade, the trader added.

 

July oats declined 6 3/4 cents to US$2.86 1/4 a bushel and December rose 1 cent to US$2.69.

 

Ethanol futures ended modestly higher in light trade. July ethanol rose 2.2 cents to 1.997 a gallon and August rose 1.7 cents to US$1.935.

 

Friday, the U.S. Department of Agriculture is scheduled to release the weekly export sales report for the week ended June 28 at 8:30 a.m. EDT. Analysts expect sales between 700,000 and 1.050 million metric tonnes. Sales for the week ended June 21 were 988,900 tonnes.