August 8, 2006

 

CBOT Corn Review on Monday: Down on soy weakness, weather, technicals

 

 

Chicago Board of Trade corn futures settled lower Monday as a combination of bearishly construed factors pressured prices, sources said.

 

CBOT September settled 5 1/4 cents lower at US$2.39 3/4 per bushel and December ended down 5 1/4 cents at US$2.57. The e-CBOT day session volume in December was 17,609 contracts.

 

Weaker prices overnight and double-digit losses in soybeans pushed prices lower at the start of trading, a floor analyst said.

 

November soybeans finished the session 15 cents lower at US$5.82 per bushel.

 

Favorable weather forecasts for crop development and better-than-expected rain in parts of the western corn belt over the weekend added to the poor tonnee, he noted. Monday morning's weather outlook was not viewed positively by the market, he added.

 

Uncertainty over Monday afternoon's weekly crop conditions report also limited buying interest, a commission house analyst said.

 

Conditions could be 1-2 points lower to 1-2 points higher in the good-to-excellent category, he added. Typically at this time of the year, ratings go down, but the weather last week could have improved the crop, he noted.

 

Technical selling also undermined prices with day-only December corn gapping open to the downside and ending beneath most major moving averages, a floor trader said.

 

Light fund selling also added to the losses, with fund selling estimated at 3,000 contracts.

 

The market took little notice of Monday morning's export inspections, with the USDA reporting 48.307 million bushels inspected for export, within the 45-50 million bushels expected by analysts.

 

Buyers Monday included O'Connor, which bought 2,000 December, Tenco bought 1,000 December, and JP Morgan bought 500 December.

 

ABN Amro sold 1,400 December, JP Morgan sold 1,000 December, Tenco sold 700 December and 500 March, and Citigroup sold 500 December.

 

Oat futures settled lower as fund and technical related selling pushed prices lower before light commercial related buying surfaced to support prices at lower levels, a floor trader said.

 

September oats declined 3 1/2 cents to US$1.81 per bushel while December fell 4 1/4 cents to US$1.89 1/4.

 

Ethanol futures ended mostly higher in thin activity. August ethanol gained 3 cents to US$2.59 cents per gallon and September increased 1/2 cent to US$2.53 1/2.

 

Monday afternoon, the U.S. Department of Agriculture is scheduled to release the weekly crop progress report at 3 p.m. CDT (2000 GMT). Last week, 56% of the U.S. corn crop was rated in good-to-excellent condition.