July 19, 2007

 

CBOT Corn Review on Wednesday: Settles higher on oversold ideas, soy

 

 

Chicago Board of Trade corn futures rose Wednesday as prices bounced back from recent oversold conditions and found support in higher soybean prices and drier long-range weather forecasts, traders said.

 

September corn gained 4 1/2 cents at US$3.27 per bushel, December rose 5 3/4 cents at US$3.42 1/2, and March gained 6 1/4 cents at US$3.57 1/2.

 

Wednesday, traders began turning their attention to drier, hotter weather forecasts for the coming week but still kept their focus on how much moisture fell in the Midwest following recent showers, said Shawn McCambridge, senior grains analyst with Prudential Financial.

 

"Coming into the session there was a general perception that the downside losses were overdone," he said.

 

Corn prices dipped slightly soon after the pit-open, but exhausted selling interest and short covering helped prices rebound from their lows, McCambridge said.

 

Tuesday's trading took corn prices to 8 1/2-month lows with expected moisture in the near-term weather forecast. However, the rains were thought to be spotty leaving dry areas in parts of western Iowa, South Dakota and Minnesota, analysts said.

 

Midday forecasts were basically unchanged from earlier predictions with rain expected in the U.S. Midwest in the near-term, with longer-term models predicting warmer and drier weather, analysts said.

 

Higher soybean and wheat prices also lent support to corn Wednesday as November soybeans gained 16 cents at US$8.76 1/2 a bushel and September wheat rose 22 1/4 cents at US$6.23 1/2 a bushel.

 

Price direction on Thursday will key on expected rains in the western U.S. Midwest and overnight weather forecasts, a commission house analyst said. In open auction trading, FC Stonnee bought 1,000 December and RJ O'Brien bought 700 December.

 

Commodity fund buying was estimated at 4,500 contracts.

 

In options trading, Man Financial bought 4,000 December US$4.60 calls and 2,000 September US$4.60 calls. RJ O'Brien bought 2,000 December US$4.00 calls and sold 1,000 December US$3.70 calls and 500 December US$3.80 calls.

 

On daily technical charts, December traded an inside day, between the high and low established in Tuesday's session. December remained below its major moving averages. December's 14-day Relative Strength Index was 38.89.

 

Oat futures closed slightly lower after a day of quiet trade with little fresh news feeding the market, analysts said. The U.S. harvest continues and there doesn't appear to be any problems with Canada's crop, a commission house analyst said.

 

September fell 1 3/4 cents to US$2.47 per bushel, December lost 3/4 cent to US$2.51 1/4, and March fell 1 1/4 cents to US$2.61 1/4.

 

Ethanol futures ended higher in thin trade. August ethanol settled 2 cents higher at US$2.013 per gallon and September rose 3.4 cents to US$1.944.

 

Thursday, the U.S. Department of Agriculture is scheduled to release the weekly export sales report for the week ending July 12. Analysts expect sales between 550,000 - 1.05 million metric tonnes.