August 1, 2006

 

CBOT Corn Review on Monday: Underpinned by mo-end position squaring

 

 

Corn futures at the Chicago Board of Trade finished higher Monday despite forecasts expecting widespread rain later this week as end-of-month position squaring supported prices, sources said.

 

September corn settled 1 3/4 cents higher at US$2.39 per bushel and December gained 2 1/2 cents to US$2.56.

 

The funds were light buyers Monday as they supported their positions at month's end, a commission house analyst said.

 

Stronger overnight values based on the extremely hot weather in the U.S. Midwest acted as support for prices early in the session.

 

However, overnight forecasts predicting rain and more moderate temperatures in the region acted to limit the upside, a floor trader said.

 

The overnight and midday weather forecasts predict rain and more moderate temperatures to move into the U.S. corn belt with rainfall expected to reach 85% of the area, said Joel Widenor, a meteorologist with Earth Sat's CropCast Weather.

 

The weather is important to corn but it's even more important to soybeans, a floor analyst said. Light corn-soybean spreading was also supportive to prices, he added.

 

Ideas that Monday afternoon's crop progress report would show a decline in conditions also limited selling interest, a commission house broker said. Traders and analysts expect a 1-to-3 percentage-point decline in corn's good-to-excellent category.

 

Last week the U.S. Department of Agriculture reported that 59% of the crop was rated in good-to-excellent condition, down three percentage points from the previous week.

 

Export inspections were under analyst expectations but had little impact on the market, sources said.

 

The USDA reported 43.297 million bushels of corn were expected for export, below the 45-50 million anticipated by analysts.

 

Buyers Monday included FC Stonnee, which bought 700 December. Citigroup bought 500 December, ADM Bought 300 September and 200 December and Shatkin-Arbor bought 200 December.

 

Sellers Monday included JP Morgan which sold 1,500 December, 400 March and 200 September. ABN Amro sold 400 December, Citigroup sold 400 September and Fimat sold 400 December and 100 March.

 

In spread trading Fimat bought 10,000 September-December.

 

Overall net commodity fund buying was estimated at 1,000 contracts.

 

Oat futures ended mixed with the nearby months lower as the commodity funds exited out of nearby September and into December positions, a floor trader said.

 

September oats declined 6 cents to US$1.89 1/2 per bushel while December contract fell 1 1/2 cents to US$1.98 1/2.

 

Ethanol futures settled higher in light trading. The August contract rose 2 9/10 cents to US$2.55 9/10 cents per gallon and September gained 1 9/10 cents to US$2.55 9/10.