August 23, 2007

 

CBOT Corn Review on Wednesday: Climbs on spillover strength, technical support

 

 

Corn futures on the Chicago Board of Trade ended higher Wednesday, propelled to the upside by spillover support from other grains and technically inspired buying, analysts said.

 

September corn ended 9 cents higher at US$3.47 1/2, and December finished 9 1/4 cents higher at US$3.64 1/4.

 

The supportive influence of sharply higher wheat and soybean futures set the tonnee of the day, with technical buying featured as bullish momentum was energized by the December contracts ability to bolt above key resistance at its 50-day moving average, analysts said.

 

Lingering worries over potential field losses due to excessive rains in the upper Midwest and heat stress in the southern belt added mild support to aide the bullish tonnee, traders added.

 

Talk of the market already establishing a seasonal low attracted buyers as well, with strong underlying demand helping corn rally to 5 1/2 week highs, analysts added.

 

Crop scouts from the Pro Farmer Midwest Crop Tour touring fields in the western Midwest said corn yields in the western section of Iowa are comparable to last year. Scouts on the western leg of the tour fanned out east from Nebraska City, Neb., and are surveying the western 40% of Iowa.

 

In eastern leg of the tour Wednesday morning, scouts found dry fields with large cracks but the corn crops are in pretty good condition. The tour headed out of Bloomingtonne, Ill., to sample fields on 10 separate routes.

 

The DTN Meteorlogix weather forecast calls for up to two inches of rain by Friday in the western Midwest, and one and one-half inches of rainfall in northern Illinois and the Great Lakes area. This sector of the Midwest is beginning to show signs of crop stress because of very wet conditions.

 

Dry and hot conditions again dominate the southern Midwest and Delta. More dryness will remain through Friday, with stressful temperatures in the mid-90s to 103 Fahrenheit; hottest in the Delta. The Ohio Valley has some cooler weather and a chance for showers during the weekend; however, the Delta will have only isolated thundershowers. The overall weather pattern of hot and potential crop-withering dryness remains in effect over this sector of the main U.S. crop areas, Meteorlogix reports.

 

On tap for Thursday, U.S. Department of Agriculture is scheduled to release its weekly export sales report at 8:30 a.m. EDT. Analysts predict corn sales of 600,000 to 1.150 million metric tonnes.

 

In pit trades, buyers and sellers were scattered among various commission houses, with speculative fund buying estimated at 8,000 lots.

 

CBOT oat futures rose on spillover buying from strong gains in neighboring markets, a floor broker said. CBOT wheat, soybeans and corn climbed during the day session. September oats finished 7 cents higher at US$2.52 per bushel, and December oats closed up 12 cents at US$2.64.

 

Ethanol futures closed firmer. September ethanol settled 0.004 cent higher at US$1.728 per gallon, and October ethanol closed 0.014 cent higher at US$1.665.