July 15, 2006

 

CBOT Corn Review on Friday: Up; consolidates ahead of weekend

 

 

Corn futures at the Chicago Board of Trade settled with thin gains Friday.

 

The market consolidated after Thursday's declines, supported by forecasts predicting above-normal temperatures in much of the U.S. corn belt over the near term, sources said. The crop in much of the U.S. Midwest is in its critical stage of pollination and excessive heat can impact its ability to reproduce.

 

July corn went off the board 1 cent higher at US$2.53 1/2 per bushel, September settled up 1/2 cent at US$2.60 3/4 and December gained 3/4 cent to US$2.76 3/4.

 

The market consolidated after the USDA reports on Wednesday and ahead of the weekend, said John Kleist, of Kleist Ag Consulting in Arlingtonne Heights, Ill.

 

There was no appreciable change in the near-term forecast but the market is waiting until Sunday night for confirmation of the hot weather expected, a commission house analyst said.

 

There is a widespread reluctance to be short heading into a weekend when the market is looking at hot and dry weather, a floor trader added.

 

The U.S. Midwest will remain mostly dry during the next five days with temperatures expected in the low to mid 90 degrees Fahrenheit for much of the region, said Don Keeney, a meteorologist with EarthSat's CropCast Weather. Iowa will remain dry over the next five days and temperatures could reach triple digits in some locations in the state on Sunday, he noted.

 

With the hot weather forecasts and concerns about moisture, it's a speculators' weekend, said Kleist. There could be some fireworks in Sunday's overnight trade if some of the more aggressive hot and dry forecasts come true, he said.

 

Another floor trader noted trading was cautious as rain fell in portions of the corn belt overnight despite forecasts calling for dry conditions, pressing the market in early trade.

 

On technical charts, December ended above most major moving averages.

 

Buyers Friday included JP Morgan, which bought 5,000 December, ABN Amro bought 1,000 December, Fimat bought 1,000 December, and Rosenthal bought 1,000 September.

 

Sellers Friday included Merrill Lynch, which sold 5,100 September, FC Stonnee sold 1,000 December, Fimat sold 1,000 December, and UBS sold 1,000 December and 500 September.

 

Overall fund buying was estimated at 3,500 contracts.

 

Oat futures ended modestly higher in thin trade as light fund buying underpinned the market despite hedge-related selling, sources said.

 

September oats gained 3 3/4 cents to US$2.02 3/4 per bushel while December contract rose 1 1/2 cents to US$2.04 1/2.

 

Ethanol futures settled lower in light trade. The August contract fell 4 cents to US$3.01 per gallon and the September contract declined 3.5 cents to US$2.715.

 

On Friday afternoon, the Commodity Futures Trading Commission is scheduled to release the latest Commitments of Traders Report. On Monday, the U.S. Department of Agriculture is scheduled to release the weekly export inspections at 10 a.m. CDT and the weekly crop progress report at 3 p.m. CDT (2000 GMT).