July 12, 2007

 

CBOT Corn Review on Wednesday: Settles mixed ahead of USDA data

 

 

Chicago Board of Trade corn futures settled mixed Wednesday as position squaring and the lack of fresh news weighed on the nearby months, a floor analyst said.

 

July corn slipped 2 cents to US$3.36 per bushel, Sep declined 2 1/2 cents to US$3.43, and Dec fell 1 1/2 cents to US$3.55 1/2.

 

Corn was following soybeans and the inability of soybeans to move sharply either direction limited the volatility in corn, the analyst said.

 

"It was a technical bounce around, wait for the report type of day," said Ross Carstens, an analyst at Commodity Services in Des Moines, Iowa. The U.S. Department of Agriculture supply/demand data is due out Thursday, and the midday weather forecast models were in conflict with neither one showing an "extreme either way" to impact the market. In some areas moisture is needed but it is not excessively stressful as far as crop conditions are concerned, he said.

 

People are expecting a bearish report Thursday and the corn market ignored the sharp gains in wheat, a commission house analyst said. Sep wheat rallied 20 1/4 cents to US$6.22.

 

In the 2007-08 supply/demand balance sheet U.S. corn ending stocks are estimated at 1.418 billion bushels, sharply above the 997 million estimated in June, according to a survey of 15 analysts by Dow Jones Newswires.

 

The average supply/demand ending stocks estimate for the 2006-07 crop year balance sheet was 1.031 billion bushels, 44 million bushels above the 987 million estimated in June according to an average of 14 analysts. The USDA is scheduled to release the report Thursday at 8:30 a.m. EDT (1230 GMT).

 

At midday, some longer-term forecasts predicted an increase chance of rain for later in the month, but the market is waiting of future forecasts to confirm this, a commission house analyst said.

 

Price direction on Thursday will depend on the supply and demand report, overnight weather forecasts, the direction of soybeans and if there is additional short covering ahead of the report on Thursday, a trader said.

 

On day session technical charts, electronically December settled above its 10-day moving average but below its other major moving averages.

 

In open auction trading, JP Morgan bought 1,500 December and Man Financial sold 1,000 December.

 

In options trading, JP Morgan sold 1,000 December US$4.00 calls and 1,000 August US$3.80 calls. Citigroup sold 1,600 March US$3.50 puts.

 

Oat futures ended lower as fund selling in September weighed on the market, a floor trader said. July oats declined 5 1/4 cents to US$2.89 per bushel, September fell 4 1/4 cents to US$2.67 1/2, and December lost 3 cents to US$2.71.

 

Ethanol futures settled lower in modest trade. August ethanol slipped 0.008 cent to US$1.972 per gallon and September fell 2 cents to US$1.91.

 

In addition to the supply/demand report, the USDA is scheduled to release the weekly export sales report at 8:30 a.m. EDT. Corn sales are expected between 500,000-900,000 metric tonnes for the week ended July 5.