July 27, 2007

 

CBOT Corn Review on Thursday: Rallies on friendly weather, wheat strength

 

 

Chicago Board of Trade corn futures settled higher after midday weather forecasts lessened rain chances in the western Midwest and as technical buying and spillover from wheat futures added to the gains, analysts said.

 

September corn ended up 6 cents at US$3.17 1/2 per bushel, December closed up 5 3/4 cents at US$3.30, and March rose 6 cents to US$3.48 1/2.

 

"All of a sudden the western grain belt doesn't look as wet as we thought," said Tim Hannagan, analyst with Alaron Trading in Chicago.

 

The midday weather forecasts moved expected rainfall through the end of the week in the Midwest northeast of the crop areas in need of moisture, Hannagan said. The northwestern corn belt, including the Dakotas, Minnesota and western Iowa, are in need of additional moisture to get the crops through their key pollination stages without damage, Hannagan said.

 

Forecasts through Friday call for decent rainfall in the central and eastern Midwest, but smaller amounts in the west, T-storm Weather said. Estimates say 90% of the western corn belt will receive less than 0.25 inch of rain, Hannagan said. Rainfall chances after Thursday are very small for the northwestern corn belt until the middle of next week, T-storm said.

 

"There's some concern in here in corn that we might be losing quality conditions again on Monday's report on rain fading out and not being as much as we thought," Hannagan said.

 

Before midday forecasts were released, corn had already made gains on support from strong wheat prices after positive U.S. wheat export sales were released Thursday morning, analysts said

 

Technical buying and short covering following recent declines in corn prices were also featured Thursday.

 

In open auction trading, ADM bought 1,500 September and Tenco bought 800 September. Rand Financial sold 400 September.

 

In options trading, Man Financial bought 5,000 December US$5.00 calls, 2,000 September US$3.70 puts and sold 2,000 September US$3.50 puts. FC Stonnee sold 1,600 September US$3.60 calls, and RJ O'Brien sold 1,000 December US$3.50 calls.

 

Commodity fund buying was estimated at 5,000 contracts.

 

CBOT oat futures settled higher after rallying on fund and technical buying and spillover from higher feed grain markets, a trader said. Large fund buying was active early, and little selling was active to offset gains, the trader added.

 

Sep ended 4 cents higher at US$2.55 per bushel, Dec settled up 4 1/4 cents at US$2.63.

 

Ethanol futures finished mixed in light trade. August ethanol settled 0.9 cents higher at US$1.979 per gallon and September ended 2.1 cents lower at US$1.865.