July 25, 2006

 

CBOT Corn Review on Monday: Up on weather, technical recovery

 

 

Corn futures at the Chicago Board of Trade settled modestly higher Monday as weather and light fund buying supported the market in a technical recovery from last week's lows, floor sources said.

 

September settled 1 3/4 cents higher at US$2.39 per bushel and December gained 1 3/4 cents at US$2.55 1/4.

 

Weather premium was built into the market from the opening, floor sources said, and largely unchanged midday forecasts did little to move the market.

 

The warmer, drier forecast may be too late in the growing season to affect the corn crop, sources said.

 

"(Short-term) temperatures for the most part will behave themselves," with readings in the mid- to upper-80s, said John Dee of Global Weather Monitoring. He forecasts 1/4-1 inch of precipitation Wednesday-Friday for the eastern two-thirds of the corn belt, with little rainfall in the western corn belt.

 

In the 6-10 day forecast, Dee predicts a ridge will produce above-average temperatures and below-average precipitation in much of the U.S. Midwest. Temperatures will be in the mid-upper 80s west of the Mississippi and upper 80s-low 90s east of the Mississippi, Dee said.

 

Buyers on Monday included Man Financial, which bought 1,200 December. FC Stonnee bought 600 December, JP Morgan bought 1,000 December and 500 September, Rand Financial bought 500 December and Tenco bought 400 December.

 

Sellers Monday included UBS, which sold 1,000 December. Man Financial sold 600 December and Citigroup sold 500 September.

 

Fund buying was estimated at 3,800 contracts.

 

In spread trading, JP Morgan bought 2,000 September-March U.S. weekly corn inspected for export for the week ending July 20 totaled 49.867 million bushels, the U.S. Department of Agriculture reported Monday. This was at the high end of analyst expectations of 36-50 million bushels. Export inspections for the week prior totaled 46.915 million bushels.

 

Oat futures settled higher in a quiet trading session, a floor trader said. He noted fund buying of the September contract. September oats gained 2 1/2 cents at US$1.92 1/4 per bushel and the December contract gained 1 3/4 cents to US$1.95 1/4.

 

Ethanol futures settled unchanged in modest trade, the August settled at US$2.80 per gallon and the September contract at US$2.70.

 

On Monday at 3 p.m. CDT, the U.S. Department of Agriculture is scheduled to release weekly crop condition ratings for the week ended July 23. Analyst expectations are mixed for corn and soybeans ratings, ranging from 1-2 percentage points higher to 1-2 percentage points lower in the good-to-excellent category. Last week, corn was rated at 62% good-to-excellent condition and soybeans were 57% in the same category. Spring wheat conditions are expected to decline 1-3 percentage points. Last week's report placed spring wheat in 34% good-to-excellent condition.