July 14, 2006

 

CBOT Corn Review on Thursday: Drops on profit-taking, wheat slide

 

 

Corn futures at the Chicago Board of Trade ended with moderate losses Thursday, falling to new lows on the close as the lack of fresh fundamental news led to profit-taking, sources said.

 

July corn declined 6 3/4 cents to US$2.52 1/2 per bushel, and December fell 8 cents to US$2.76.

 

Midday forecasts were confusing, with some forecasters expecting rain in the near term in the western belt ahead of the hot temperatures forecast for the remainder of this week and the early part of next week, they added.

 

Judging by the way the market acted, the weather was seen as not as threatening as previously, said Vic Lespinasse of AG Edwards & Sons.

 

Commodity funds that were large buyers Wednesday were light sellers Thursday, he added.

 

The market was due for a correction after its recent rally, he said. December corn had rallied almost 20 cents from July 5 before Thursday's session.

 

Technical selling added to the weak tonnee as December was unable to trade above resistance at US$2.82, a commission house analyst said.

 

Spillover weakness from sharp losses in wheat futures also added to the negative tonnee, sources said. September CBOT wheat futures fell 19 cents to US$3.95 1/2 per bushel.

 

This morning's lower-than-expected U.S. Department of Agriculture weekly corn export sales had little impact, floor sources said.

 

Weekly corn exports were 668,600 metric tonnes, below the 700,000-1.0 million tonnes expected by analysts. Included in that total were 79,400 tonnes sold for delivery in the 2006-07 marketing year.

 

On technical charts, December traded an inside day, below Wednesday's high and low on day-only technical charts.

 

Buyers Thursday included JP Morgan, which bought 1,500 December, Fimat bought 900 December, FC Stonnee bought 800 December, RJ O'Brien bought 800 December and Calyon Financial bought 500 December.

 

Sellers Thursday included UBS, which sold 1,500 December, FC Stonnee sold 1,200 December, Tenco sold 1,000 December, and Rosenthal sold 600 December.

 

In spread trading, JP Morgan bought 4,000 September-December.

 

Overall fund selling was estimated at 3,000 contracts.

 

Oat futures ended mostly lower, pressured by the sharp losses in wheat and the declines in corn, sources said.

 

July oats rose 3 cents to US$2.28 per bushel while December contract fell 3 cents to US$2.03.

 

Ethanol futures finished mostly higher in light activity. The August contract gained 5 cents to US$3.05 per gallon and the September contract also rose 5 cents, to US$2.75.