August 7, 2007

 

CBOT Corn Review on Monday: Ends mixed; recovers from early losses

 

 

Chicago Board of Trade corn futures settled mixed Monday, recovering moderate losses set earlier in the session on better-than-expected rains in the U.S. Midwest over the weekend, an analyst said.

 

Sep corn slipped 3/4 cent to US$3.25 3/4 per bushel, Dec ended unchanged at US$3.43 and Mar gained 1/2 cent to US$3.59 1/4.

 

Rain over the weekend and additional rain forecast for the first part of this week had corn trading well below Friday's settlements early following the overnight theme, a trader said. However, the inability of corn to move below early levels helped bring about short covering, with light commercial buying also helping prices recover, the trader said.

 

Spillover support from new contract highs set in nearby wheat also added to the recovery, an analyst said. Both September and December wheat set new life-of-contract highs.

 

"The ability of December wheat to trade to a new contract high was a key supportive feature for corn," said Dan Cekander, an analyst with Fimat Futures LLC.

 

Concerns that crop conditions might decline more than the 3 to 5 percentage points expected by analysts in Monday afternoon's crop progress report also provided some buying incentive, a floor trader said.

 

Technically corn traded very well, a commission house analyst said. The corn market is not going to "roll over" until it sees Friday's U.S. Department of Agriculture production and yield reports, the analyst said.

 

Export inspections were below the previous week's total but had little market impact. The USDA reported that corn inspected for export totaled 24.517 million bushels for the week ended Aug. 2, below the 38.0 million inspected the previous week.

 

Price direction on Tuesday will depend on the rains expected in the U.S. Midwest as well as overnight weather forecasts, a trader said.

 

In open auction trading, Tenco bought 1,000 December and UBS bought 1,200 December.

 

Commodity fund selling was estimated at 2,000 contracts.

 

In options trading, Fimat sold 1,000 December US$3.20 puts and Merrill Lynch bought 800 December US$4.00 puts.

 

Oat futures ended higher as spillover support from the rest of the feedgrains supplied support to the market, a commercial analyst said. Activity was light, limited by a holiday in Canada, which is a major supplier of oats to the U.S. market.

 

Sep gained 2 1/2 cents to US$2.60 1/2 per bushel, Dec rose 1 cent to US$2.70, and Mar settled up 1 1/2 cents to US$2.77.

 

Ethanol futures ended mixed finished in thin trade. Sep ethanol fell 2 cents to US$1.822 per gallon and September ended unchanged at US$1.798.

 

The weekly crop progress report is scheduled for release at 4:00 p.m. EDT.