July 20, 2006

 

CBOT Corn Review on Wednesday: Slightly lower; trims early declines

 

 

Chicago Board of Trade corn futures settled slightly lower Wednesday, recovering from earlier losses attributed to heavy fund liquidation, sources said.

 

September corn settled 1 3/4 cents lower at US$2.44 3/4 and December closed down 3/4 cent at US$2.61 3/4.

 

Overnight forecasts predicting cooler temperatures and possible scattered precipitation in parts of the U.S. Midwest pressured prices early on, they noted, with December trading at its lowest level since June 29.

 

However, losses were trimmed late in the session with active fund buying and ideas that the market was oversold and due for correction, one analyst added.

 

"The market's been way overdone the past couple of days and I don't think you can keep pummeling it," he added.

 

Also, a hotter, drier long-term weather forecast may have cast an extremely slight bullish light on the market, sources noted.

 

Cooler temperatures are expected in the forecast, with Thursday in the upper 80s-mid 90s, said Mike Palmerino of DTN Meteorlogix. Friday will have temperatures in the low to mid 80s, continuing into the weekend.

 

Weather will dry out across the western corn belt Thursday and spread to the eastern belt Friday, continuing through the weekend, he said.

 

"Beyond the next 24 hours, there is no significant rainfall expected through the first half of next week," said Palmerino.

 

On Thursday, the U.S. Department of Agricultures is expected to release export sales for the week ended July 13. Analysts estimate weekly sales between 550-800 thousand metric tonnes.

 

Sellers Wednesday included JP Morgan, which sold 12,000 December. Man Financial sold 3,000 December, RJ O'Brien sold 10,000 December and 10.000 September, and ABN Amro sold 1,500 December.

 

Buyers Wednesday included Goldenberg-Hehmeyer, which bought 4,000 December. ABN Amro bought 1,500 December, Tenco bought 1,000 December, and UBS bought 1,500 September.

 

Oat futures settled moderately lower as fund selling and moderating weather in parts of Canada's oat-growing regions pressured prices, a floor trader said.

 

September oats declined 6 1/4 cents to US$1.93 1/2 per bushel while December fell 6 1/2 cents to US$1.93 3/4.

 

Ethanol futures finished lower in light trading. The August contract slipped 4 cents to US$2.92 per gallon and September also fell 4 cents to US$2.70.