August 15, 2007

 

CBOT Corn Review on Tuesday: Lower; lacked underpinning influences

 

 

Chicago Board of Trade corn futures ended lower Tuesday, backpedaling in the absence of fresh supportive market influences, analysts said.

 

September corn ended 3 1/2 cents lower at US$3.27 1/2, and December finished 4 cents lower at US$3.45.

 

The market does not have as much of an issue with weather at this point, so with the potential for some finishing rains in dry areas, the market had little to underpin prices, analysts said.

 

Futures stumbled in unison with the other commodities in early action, succumbing to generalized liquidation selling after the stock market fell sharply, analysts said. However, the ability of stocks to stabilize kept a floor beneath prices, with spillover support from sharply higher wheat futures serving as an underpinning feature, analysts added.

 

Meanwhile, the ability of the most active December future to hold support at Friday's lows helped temper downside pressure, but a wetter 6-10 day forecast for some dry areas of the soybean belt applied light pressure to weigh on prices into the close, a trader added.

 

The DTN Meteorlogix weather forecast calls for several periods of rain showers along with milder temperatures in the upper Midwest crop areas during the balance of this week. Total rainfall during the next five days will range up to one and one-half inches. This is a beneficial outlook for soybean pod filling. Southeast areas of the Midwest continued to suffer from mostly dry and hot conditions which increase stress on filling crops. The situation is also stressful in the Delta. Hot and dry weather will continue to increase stress on filling crops for at least the next five days.

 

The next six to ten days, through Friday, August 24, offer an uncertain weather scenario for the central U.S. Both U.S. and European forecast models are suspect. Metorlogix looks for rainfall to again concentrate on the Interstate 80 corridor in the western and northern Midwest, but for more heat stress from central Illinois southward.

 

In pit trades, Man Financial bought 300 December and sold 2,300 December, Rand Financial sold 800 December, and Fimat sold 300 December. Speculative fund selling was estimated at 5,000 contracts.

 

CBOT oat futures ended mostly higher on spillover support from a rally in wheat, floor traders said. September oats fell 2 1/4 cents to US$2.48 per bushel, December finished up 1 cent at US$2.60 and May rose 1 1/2 cents to US$2.77 1/2.

 

Ethanol futures ended in negative territory. September ethanol slipped .039 cent to US$1.820 per gallon and October closed .015 cent lower at US$1.735.