August 28, 2007

 

CBOT Corn Review on Monday: Down, crop estimate attracts speculative sales

 

 

Chicago Board of Trade corn futures stumbled lower Monday, succumbing to light speculative sales amid bearish private crop estimates and advancing harvest activity in the southern belt, analysts said.

 

September corn ended 5 3/4 cents lower at US$3.35 3/4, and December finished 5 3/4 cents lower at US$3.53.

 

The lower tonnee was consistent, with Friday's Pro Farmer crop estimate putting the market on its heels from the outset, a CBOT floor analyst said.

 

The crop estimate implied a big crop is in the fields, and without any weather issues for the week and overbought conditions, downside movement was path of least resistance, he added.

 

The market gapped lower on technical charts, uncovering pre-placed sell stops as the December futures dipped below its key 50-day moving average, analysts said. This continued until late strength in soybeans spilled over to trigger some position evening down the stretch, analysts added.

 

Some locally heavy rainfall is expected during the next two days in the wetter sections of the northwestern Midwest, Cropcast Weather Services said in a forecast. However, the rains should be neither as heavy nor as persistent as last week. Most importantly, the return of drier weather from Wednesday through the end of the 10-day period should give the region a needed opportunity to see flooding concerns abate, Cropcast said.

 

Professional Farmers of America on Friday estimated the 2007-08 U.S. corn crop at 13.109 billion bushels. The organization sees the U.S. corn yield at 153.47 bushels per acre. This compares to the U.S. Department of Agriculture's projection of a 2007-08 corn crop of 13.054 billion bushels, based on an average yield of 152.8 bushels/acre, in its Aug. 10 report.

 

The U.S. Department of Agriculture is scheduled to release its weekly crop progress report at 4 p.m. EDT. Analysts anticipate crop ratings to have stabilized in the week ended Sunday.

 

In pit trades, JP Morgan bought 300 September and 300 December. JP Morgan sold 400 September, Fimat sold 300 December and 300 July. Speculative fund selling was estimated at 4,000 contracts.

 

CBOT oat futures ended higher Monday, rising on technically inspired speculative buying. September oats ended 1/2 cent higher at US$2.47 1/2 per bushel, and December oats gained 3 1/4 cents to US$2.60 3/4.

 

Ethanol futures finished higher. September ethanol gained .008 cent to US$1.729 per gallon, and October ethanol settled up .011 cent at US$1.650.