July 28, 2006

 

CBOT Corn Review on Thursday: Higher on late technical bounce

 

 

Corn futures at the Chicago Board of Trade ended higher Thursday with fund buying triggering a late technical bounce in the session, floor analysts said.

 

September corn futures closed 1 3/4 cents higher at US$2.37 3/4 per bushel. December futures settled 1 1/2 cents higher at US$2.54 1/4.

 

The market struggled to find lasting direction through most of the day, until the most-active December contract's inability to challenge underlying technical support at US$2.51 attracted short-covering interest down the stretch, analysts said.

 

Earlier, analysts attributed the day's sideways activity to corn being stuck between support from wheat gains met with weakness in soybeans.

 

The market continued to leak lower, not willing to respect the heat like it did previously, said Don Roose, president of U.S. Commodities.

 

Floor sources said corn is less weather-sensitive at this point, but rain is still bearish to the market.

 

"It's still responding to fundamentals," the source added.

 

Meanwhile, weather forecasts show a mix of heat and precipitation for the next 10 days.

 

Forecasts for the next five days predict precipitation with 40% coverage in the Midwest, said Joel Widenor of Cropcast Weather. The majority of the rainfall will be focused on the southern corner of the corn belt, he said.

 

In the western U.S. Midwest, temperatures are predicted to range from the middle 90s to 105F late in the weekend, said Widenor.

 

In the eastern U.S. Midwest, Widenor predicts a consistent chance for showers through the weekend, concentrated in the southeast Ohio River Valley. Highs will be in the low to mid 90s, he said.

 

Fund selling was estimated at 2,500 contracts.

 

Buyers Thursday included JP Morgan, which bought 2,500 December. Fimat bought 1,000 December, Goldenbeg-Hehmeyer bought 600 December, Calyon bought 500 December and ABN Amro bought 300 December.

 

Sellers on Thursday included JP Morgan, which sold 1,100 December, Citigroup sold 1,000 September, Tenco sold 500 December, and RJ O'Brien sold 400 December.

 

CBOT oats futures closed higher Thursday after finding strength in fund buying, a floor source said. The most-active December contract closed 2 1/4 cents higher at US$1.97 3/4 per bushel and September futures closed 1/4 cent higher at US$2.01 3/4.

 

Ethanol futures closed lower on the CBOT Thursday. August contracts slipped 11.4 cents to US$2.51 per gallon and September futures declined 7.3 cents to US$2.54.