August 24, 2007

 

CBOT Corn Review on Thursday: Ends lower; retreats from earlier advances

 

 

Chicago Board of Trade corn futures ended modestly lower Thursday, pulling back from earlier gains on exhausted buying interest.

 

September corn ended 2 1/4 cents lower at US$3.45 1/4, and December finished 2 1/4 cents lower at US$3.62.

 

The inability of futures to attract follow-through buying after rallying to one-month highs in early action prompted speculative profit-taking, pinning prices in negative territory down the stretch, analysts said.

 

A pullback in wheat futures after setting record highs added to the defensive tonnee, they said, with downside pressure accelerating once the December future slipped below its 100-day moving average.

 

Nevertheless, traders said the market remains above major moving average support, with strong underlying demand, and concerns over possible crop damage in the northern Midwest supportive features limiting downside pressure.

 

Crop scouts from the Pro Farmer Midwest Crop Tour touring fields in the western Midwest said corn crops are showing variability in southern Minnesota. One group of scouts on a route running from Worthingtonne to Okabena in Jackson County saw variable results. Corn yields in a Jackson county field surveyed were estimated at 138.6 bushels per acre. However, in another field in Jackson County, along county highway 17, scouts noted good conditions with a corn yield of 212 bushels.

 

In eastern leg of the tour Thursday saw very good corn crops as the scouts toured several southern Iowa counties. They found an average corn yield of 166 bushels an acre, which one scout/producer said was "unbelievably good" for this area south of Interstate 80.

 

The DTN Meteorlogix weather forecast calls for widespread rain and thunderstorms Thursday through Friday in the northern sector of the Midwest. Rainfall totals will approach two-and-a-half inches, with locally heavier amounts, in Nebraska, Iowa, northern Missouri and southeast Minnesota. Rains of more than an inch will move across Wisconsin, Michigan, northern and central Illinois, northern Indiana and northwestern Ohio, Meteorlogix reports.

 

In pit trades, Fimat and Penson GHCO each bought 3,000 December, MF Global bought 1,000 December, Prudential Financial bought 2,000 September, and ADM Investor Services and JP Morgan each bought 500 December. Penson GHCO sold 3,000 December, and JP Morgan sold 1,000 December and 500 July.

 

CBOT oat futures slipped following a "very bearish" report from Statistics Canada that estimated production above trade expectations, a floor trader said. Weakness in the neighboring corn market also provided spillover pressure, he said. September oats ended down 4 cents at US$2.48 a bushel, and December oats finished 5 3/4 cents lower at US$2.58 1/4.

 

Ethanol futures ended lower. September ethanol dropped 0.001 cent to US$1.727 a gallon, and October ethanol fell 0.004 cent to US$1.661.