July 7, 2010

CBOT corn futures fall on favourable crop

CBOT corn futures closed lower on Tuesday (July 6). September futures were 4-½ cents lower at US$3.68. The December contract was 5-¼ cents lower at US$3.79¼.

The weather is seen as positive for the crop and negative for price. On Tuesday (July 6), gains in wheat also helped boost corn. However, once wheat prices eased from early, highs corn followed.

The Commitment of Traders report showed that speculative trading funds were net short 39,400 contracts as of June 29 ahead of the USDA reports last week. The surge in prices prompted a round of short covering by the funds, which added to the recent price strength. Estimates are that they are currently net short only a few thousand contracts.

With further upward price momentum they will begin building a net long position.