August 4, 2007

 

CBOT Corn Review on Friday: Closes higher ahead of hot weather forecasts

 

 

Chicago Board of Trade corn futures settled higher Friday on weather forecasts calling for hot temperatures in the U.S. corn belt this weekend and early next week, but uncertainty about forecasted rains kept a cap on prices, analysts said.

 

September corn ended 2 1/2 cents higher at US$3.26 1/2 per bushel, December rose 1 3/4 cents to US$3.43, and March closed up 2 1/2 cents at US$3.58 3/4.

 

"The models keep trying to bring in heat," said Sid Love, analyst with Kropf and Love Consulting.

 

However, several forecasters are predicting thunderstorm activity beginning in South Dakota in the northwestern corn belt this weekend, with rains seen across the northern corn belt Monday through Wednesday, T-storm Weather reported.

 

If the rains are significant over the weekend, prices are expected to turn to the downside in Monday's trade, analysts said. The weather uncertainty persuaded traders to postpone entering positions in the market, analysts added.

 

Also, corn sustained no lasting price direction after Informa Economics' crop production estimates were released Friday morning, analysts said. Prices broke after the bearish numbers were released, but recovered to trade shortly after the release, analysts said. Informa estimated production at 13.090 billion bushels, with a yield of 153.3 per acre.

 

"I think people are expecting maybe the USDA won't be as big as Informa," Love said. The U.S. Department of Agriculture is slated to release its crop production and supply/demand reports Aug. 10.

 

In July's supply and demand report, the USDA estimated 150.3 bushels per acre yield and production of 12.84 billion bushels.

 

On daily technical charts, December corn traded an outside day above and below the range established in Thursday's session and settled above its 20-day moving average.

 

In open auction trading, Man Financial bought 400 December and FC Stonnee bought 300 December.

 

In options trading, Rosenthal bought 4,000 December US$2.80 puts and 700 September US$3.50 calls. RJ O'Brien sold 2,000 December US$3.70 calls.

 

CBOT oat futures settled lower in thin trade on bear spreading activity, with commercials buying September and selling December, a trader said.

 

September ended 2 cents lower at US$2.58 per bushel, December settled down 1 cent at US$2.69.

 

Ethanol futures finished mixed in light trade. August ethanol settled 1.0 cent lower at US$1.905 per gallon and September ended 2.8 cents higher at US$1.842.

 

Friday afternoon, the Commodity Futures Trading Commission is scheduled to release the weekly commitments of traders for the period ended July 31. On Monday, the USDA is scheduled to release the weekly export inspections report at 11 a.m. EDT and the weekly crop progress report at 4 p.m. EDT.