July 8, 2006

 

CBOT Corn Review on Friday: Finishes lower on weather forecasts

 

 

Corn futures settled lower Friday, as bearish overnight weather forecasts set the tonnee for the session, floor sources said.

 

July corn fell 4 1/4 cents to US$2.41 1/4 per bushel and December declined 4 1/2 cents to US$2.65 3/4.

 

Follow through selling from weaker prices overnight on bearishly construed weather forecasts kept pressure on the market from the opening bell, sources said. The market is extremely sensitive to the weather forecasts at this time of the year, a floor analyst said.

 

Updated midday weather forecasts were termed "confusing" by several floor traders. DTN Meteorologix Weather's midday weather forecast predicted drier weather than previously expected for the western and northwestern sections of the U.S. Midwest with rain predicted in the southern and eastern areas in the region. Late next week, hotter and drier weather conditions are possible for the western sections of the U.S. corn belt, DTN Meteorologix Weather added.

 

The market took out some of the premium that was added in Thursday, but the market finished closer to its highs than its lows as some people added back a little premium late in the session, a floor trader said.

 

The market will be keying on those early Monday weather forecasts, he added.

 

The U.S. Department of Agriculture reported weekly corn exports were 1,274.7 million metric tonnes for the week ended June 29, within the range of analyst's estimates. A commission house broker termed the sales as "routine."

 

On technical charts, December traded within the range set earlier in the week and settled right at its 100-day moving average of US$2.65 3/4.

 

Buyers Friday included RJ O'Brien, which bought 600 December, Rand Financial, which bought 500 December, Man Financial, which bought 400 December, ADM, which bought 300 December, ABN Amro, which bought 300 December.

 

Sellers Friday included ABN Amro, which sold 1,500 December, Tenco sold 1,00 December, FC Stonnee sold 500 December, Rosenthal sold 700 December, and UBS sold 600 December.

 

Overall commodity fund selling was estimated at 3,500 contracts.

 

Oats futures finished slightly lower in thin trade as the market took its direction from corn futures Friday, a floor trader said.

 

July oats closed down 2 1/4 cents at US$2.17 per bushel and December declined 2 1/4 cents to US$1.98 1/2.

 

Ethanol futures settled mixed in modest trade with the August contract up 7 cents at US$2.84 per gallon. The September contract declined 5 cents to US$2.40.

 

Friday afternoon the Commodity Futures Trading Commission is scheduled to release the Commitment of Traders report. On Monday, the weekly export inspections are scheduled for release at 10:00 a.m. CDT.