August 26, 2008

 

CBOT Corn Review on Monday: Drops weather worry fades, speculative funds sell

 

 

Chicago Board of Trade corn futures fell as concerns about Corn Belt dryness failed to sustain the market's opening gains and speculative fund selling surfaced.

 

The most-active December corn fell 6 1/2 cents to settle at US$6.00 a bushel, off the day's high of US$6.23.

 

With the bond markets signaling more concern with recession than inflation, "the funds weren't here to buy today, they were here to take profits," a CBOT floor trader said.

 

Filling corn and soybeans in key parts of the Midwest will continue to be "under some stress due to late season dryness" during the next 10 days, DTN Meteorlogix said in a forecast.

 

But while the condition of the soybean crop can still see significant drought damage, at this point in the growing season, "corn is what it is," a CBOT floor trader said.

 

Analysts expect to good-to-excellent corn condition ratings to register somewhere between steady and down one percentage point when the U.S. Department of Agriculture releases its weekly crop progress report at 4 p.m. EDT on Monday.

 

If beans hadn't led the market to the upside Monday, corn would have struggled a little more, the trader said.

 

"The market's having a difficult time rationalizing current prices on these demand levels," he added.

 

While Tropical Storm Fay could bring some nice rains to the southeastern half of Ohio around mid-week, the forecast is mostly dry, said a Freese-Notis forecast.

 

Western Corn Belt cold fronts for mid-to late-week do not look to have the vigor that was suggested on Friday's maps, but rain is still expected in the area, with scattered thunderstorms breaking out Tuesday night in the far northwest tomorrow night and chances spreading to the northwestern Corn Belt by Friday, the private weather firm said.

 

"Localized rains could be pretty decent, but overall this looks to be more of a 'scattered' thunderstorm event where the places that get good rains are far outnumbered by the areas that get very little," Freese-Notis added.

 

Rainfall chances do not look good for the weekend and the first part of next week and may work back into the western Corn Belt by around Sept. 4, the firm said, adding at that point "we are to the point in the year where the benefits of rainfall on the corn and soybean crops start to be limited."

 

Speculative fund sold an estimated 6,000 corn contracts.

 

In other markets, CBOT oat futures closed 2 cents lower at US$3.82 a bushel.

 

Ethanol futures were mixed. September ethanol ended US$0.009 cents higher at US$2.349 per gallon, and December ethanol closed US$0.01 cents lower at US$2.30 per gallon.