August 11, 2006

 

CBOT Corn Review on Thursday: Ends lower, waits for USDA report

 

 

Chicago Board of Trade corn futures ended with thin losses Thursday in choppy, two-sided activity.

 

September fell 1 cent to US$2.38 3/4 per bushel and December also slipped 1 cent to US$2.55 3/4. e-CBOT day session volume in December was 15,956 contracts.

 

The market is waiting on Friday's U.S. Department of Agriculture production report, a floor analyst said. People are just winding up their positions ahead of the numbers, he added.

 

In a Dow Jones Newswire survey of 22 analysts, the average 2006-07 corn production estimate was 10.795 billion bushels, higher than the USDA's 10.740 billion estimate in July.

 

The average yield estimate was pegged at 149.9 bushels per acre, slightly higher than the 149.0 bushels in July. The August report will be the first field survey taken of the crop.

 

In a survey of 15 analysts, the average of 2005-06 corn ending stocks estimate was 2.041 billion bushels, 21 million bushels lower than the 2.062 estimated by the USDA in the July supply and demand report.

 

The average ending stocks estimate of the 2006-07 was 1.105 billion bushels, slightly above the 1.077 forecast by the USDA in July.

 

The USDA is scheduled to release its August crop production report on Friday at 7:30 a.m. CDT (1230 GMT).

 

Better-than-expected weekly export sales had little market impact, sources said. The USDA reported sales were 1.719 million metric tonnes, above the 950,000-1.4 million tonnes expected. Included in the total were sales of 555,900 tonnes for delivery in 2006-07 marketing year.

 

The sales were good but the market ignored the report, a floor trader added.

 

Light fund selling also provided additional weakness with commodity fund selling estimated at 1,500 contracts.

 

Although the impact of the weather declines with each day, the rains moving across the corn belt Thursday were also a negative, as it helps fill out the crop, the trader added.

 

Buyers Thursday included Man Financial, which bought 200 December, and the USA Trading Division of Man Financial bought 200 September.

 

Fimat sold 300 December, Rand Financial sold 900 December, and JP Morgan sold 400 March.

 

In spread trading, O'Connor bought 10,000 December-September and JP Morgan bought 2,000 December-September.

 

Oat futures finished at modestly lower levels as light fund selling weighed on the market despite commercial buying, a commission house analyst said. September oats settled 1 1/2 cents lower at US$1.80 1/2 per bushel while December ended down 1/2 cent at US$1.88.

 

Ethanol futures ended at lower levels in thin activity. August ethanol fell 4 cents to US$2.48 cents per gallon and September declined 2 cents to US$2.53.