August 2, 2007

 

CBOT Corn Review on Wednesday: Ends lower on weather forecasts

 

 

Chicago Board of Trade corn futures settled lower Wednesday after updated weather forecasts called for significant rain chances in the northwestern U.S. Midwest during the weekend and into next week, analysts said.

 

September corn ended down 6 3/4 cents at US$3.19 per bushel, December lost 6 1/4 cents settling at US$3.36, and March closed down 6 1/4 cents at US$3.51 1/4.

 

"The forecasts all changed and took a lot of the heat out and put substantial moisture in," said Bob Anderson, analyst with Commodity Services.

 

Futures prices began their decline after weather updates added significant moisture to rainfall chances in the northwestern U.S. Midwest, traders said. Previous days' forecasts of hot, dry weather in most of the U.S. Midwest dissipated as substantial rainfalls were predicted in the dry areas of the corn belt, including parts of South Dakota, Nebraska, Minnesota and Iowa, Anderson said.

 

Midday forecasts confirmed the expected rains, with heaviest amounts expected to fall in the northwestern U.S. Midwest, over the weekend before moving eastward across the corn belt into next week, T-storm Weather reported. The southwestern corn belt is still expected to be hot and mostly dry.

 

Before the bearish weather forecasts, corn was trading slightly lower under pressure from soybeans and commercial selling, a trader said. Other than the weather there was little fresh fundamental news, analysts said.

 

On daily technical charts, December traded an outside day above and below Tuesday's high and low prices.

 

In open auction trading, Fimat bought 500 December and Man Financial bought 500 December. JP Morgan sold 300 December and Man Financial sold 600 December.

 

In options trading, RJ O'Brien and Man Financial both bought 2,500 December US$3.00 puts, and Tenco bought 2,000 December US$3.00 puts. Penson GHCO sold 1,000 December US$3.40 calls.

 

Commodity fund selling was estimated at 2,000 contracts.

 

CBOT Oat futures settled lower on bear spreading activity and spillover pressure from lower grain markets on the floor, a trader said. Harvest pressure with Canadian harvesting expected to begin within a few days also added pressure, the trader added.

 

Sep ended 4 1/4 cents lower at US$2.57 per bushel, Dec settled down 2 3/4 cents at US$2.69.

 

Ethanol futures finished lower in light trade. August ethanol settled 5.7 cents lower at US$1.930 per gallon and September ended 7.4 cents lower at US$1.787.

 

Thursday, the U.S. Department of Agriculture is scheduled to release the weekly export sales report for the week ending July 26. Analysts expect sales between 700,000-1.15 million metric tonnes.