August 8, 2007

 

CBOT Corn Review on Tuesday: Ends near highs on positioning, soybeans

 

 

Chicago Board of Trade corn futures ended higher and near session highs Tuesday, supported by position squaring ahead of Friday's U.S. Department of Agriculture reports, strong soybean futures, and forecasts for hot and dry weather in parts of the southern US Midwest over the next several days, analysts said.

 

Sep corn rallied 9 1/2 cents to US$3.35 1/4 per bushel, Dec gained 9 cents to US$3.52 and March rose 8 1/4 cents to US$3.67 1/2.

 

Corn saw some consolidation ahead of the crop production report due out on Friday, said Jason Britt, a broker/analyst at Central States Commodities in Kansas City. There is some uncertainty about the size of the U.S. corn crop and people are evening up positions and waiting on the report for direction, he said.

 

The average production estimate for the 2007-08 crop year was 12.909 billion bushels, according to an average of 23 analysts, 69 million bushels above the 12.840 billion estimated by the USDA in July.

 

The average yield estimate for the 2007-08 crop year was 151.2 bushels per acre, according to a survey of 23 analysts, compared the 150.3 bushels estimated in July by the USDA.

 

Spillover support from higher soybean values also added to the strength as did end user buying, a floor trader said.

 

November soybeans settled 12 3/4 cents higher at US$8.62 3/4.

 

Recent rainfall has benefited the crop in the northern US Midwest but near-term forecasts expect hot and dry weather for the southern areas of the region, the trader noted.

 

Some southern sections of the U.S. Midwest are expected to remain mainly dry over the next 10 days, said Cropcast Weather.

 

The lack of moisture predicted for the southern section of the U.S. corn belt has led to ideas that corn conditions won't improve next week despite the recent rains, said Britt.

 

Price direction on Wednesday depends on if the position squaring ahead of the report continues, a trader said.

 

In open auction trading, JP Morgan bought 700 Sep and sold 300 Dec and Rand bought 800 Sep.

 

Commodity fund buying was estimated at 7,000 contracts.

 

In options trading, RJ O'Brien bought 3,000 Dec US$3.00 puts and bought 1,000 Dec US$3.40 puts. FC Stonnee sold 1,000 Sep US$3.30 puts.

 

Oat futures settled higher as light fund buying helped underpin prices, an analyst said. Light selling interest in the deferred contracts helped to limit the gains, the analyst said.

 

Sep ended up 1 1/2 cents to US$2.62 per bushel, Dec rose 2 1/4 cent to US$2.72 1/4, and Mar settled up 2 3/4 cents to US$2.79 3/4.

 

Ethanol futures ended modestly higher in light activity. Sep ethanol gained 1.7 cents to US$1.839 per gallon and October settled 1.2 cents higher at US$1.81.