July 21, 2007

 

CBOT Corn Review on Friday: Retreats after midday weather forcasts

 

 

Chicago Board of Trade corn futures ended lower Friday after speculative selling was triggered following bearish midday weather forecasts, an analyst said.

 

September corn settled 3 cents lower at US$3.18 1/4 per bushel, December declined 2 3/4 cents lower to US$3.33 1/2, and March fell 3 cents to US$3.48 3/4.

 

The midday weather forecasts predicting wetter and cooler conditions in the U.S. Midwest next week undermined higher prices that had been building on overnight forecasts since the pit open, said Joe Bedore, floor manager with FC Stonnee.

 

Traders gave up hopes of a rally and evened up their long positions, analysts said. Long position holders wanted to ensure they wouldn't be caught long the market given the updated weather forecasts, Bedore said.

 

"Traders were not going to get caught in the same position as last week being long on Sunday night," he said. "They're not going to open themselves up to a sharp move in the market like we had last Monday."

 

Overnight weather predictions took prices to session highs after the open as warmer temperatures were predicted with little rain after midweek, analysts said.

 

Loftier soybean prices added support before they fell after the midday weather forecasts, traders said.

 

In a midday weather forecast from T-storm Weather, an upper-level system is expected to move from the eastern corn belt through the central and portions of the western corn belt midweek through next weekend. The system would bring seasonably cool temperatures into the corn belt as well, the forecast said.

 

In open auction trading, Tenco bought 700 September and Fimat bought 500 September.

 

In options trading, JP Morgan bought 1,500 December US$3.40 puts and ADM sold 6,000 December 2008 US$3.40 calls.

 

Commodity fund selling was estimated at 2,000 contracts.

 

On daily technical charts, December traded at its lowest level since Nov. 1 and remained under its major moving averages.

 

CBOT oat futures settled higher Friday. Technical buying built on earlier speculative and fund buying above US$2.44 supported prices, an analyst said.

 

Sep oats ended up 1 1/2 cents at US$2.40 per bushel, and Dec also gained 1 1/2 cents to US$2.43 3/4.

 

Ethanol futures finished unchanged to higher in light activity. August ethanol settled 1.9 cents higher at US$2.009 per gallon and September ended unchanged at US$1.943.

 

On Friday afternoon, the Commodity Futures Trading Commission is scheduled to release the weekly commitments of traders for the period ended July 17. On Monday, the U.S. Department of Agriculture is scheduled to release the weekly export inspections report at 11 a.m. EDT and the weekly crop progress report at 4 p.m. EDT.