May 3, 2006

 

CBOT Corn Review on Tuesday: Falls on plantings, soybeans, technicals

 

 

Corn futures finished lower Tuesday as the rapid planting pace in Monday's crop progress report, weaker soy values after earlier gains and technical weakness pushed prices lower, floor sources said.

 

July fell 4 1/2 cents to US$2.43 1/2 per bushel and December also slid 4 1/2 cents lower to US$2.67.

 

Fundamentally, the rapid planting pace weighed on the market, said Vic Lespinasse of AG Edwards & Sons.

 

There is some rain in the forecast that might delay planting, but corn plantings are still 10% higher than the five-year average, he noted. In addition, the inability of soybeans to hold at higher levels pressed the market as well as wheat futures retreating from their highs, he added.

 

The U.S. Department of Agriculture reported Monday that 52% of the U.S. corn crop had been planted as of April 30, well above last week's level and above the 42% five-year average.

 

July soybeans settled 3 3/4 cents slower at US$6.03, after trading as high as US$6.12 earlier in the session.

 

Technical weakness also added to the defensive tonnee, a commission house analyst said. July corn was unable to trade above the US$2.48 level and that led to some technical selling, the analyst said.

 

July ended below its 10-day moving average and just above its 50-day moving average on daily charts.

 

Dry weather is forecast through early Wednesday in the western U.S. Midwest before showers are forecast for the region late Wednesday and Thursday before mainly dry weather returns Friday and Saturday, DTN Meteorlogix Weather said.

 

Scattered showers and thundershowers are forecast for the southern portion of the eastern U.S. Midwest into the northern Delta over the next several days. Amounts in this area should average 0.50-1.50 inches during this period. Light showers are expected for much of the region in the same time period, DTN Meteorlogix Weather said.

 

Temperatures in the western U.S. Midwest are expected to average near to below normal Wednesday and below normal Thursday, DTN Meteorlogix Weather said.

 

In the eastern U.S. Midwest, temperatures should average near to above normal Wednesday, and below normal north and above normal south on Thursday, DTN Meteorlogix Weather said.

 

Buyers Tuesday included Calyon Financial, which bought 500 July, Citigroup bought 500 July, Fimat bought 500 July, UBS bought 500 July, JP Morgan bought 600 July and ADM bought 200 July.

 

Sellers Tuesday included ADM, which sold 700 July, ABN Amro sold 500 July, Fimat sold 600 July, Man Financial sold 700 July, R.J. O'Brien sold 400 July and Tenco sold 400 July.

 

Commodity fund activity was estimated at even for the session.

 

Oat futures settled lower as light fund buying early in the day gave way to profit taking on ideas that the market was overbought and due for a correction, a floor analyst said. The July contract fell 5 1/4 cents to US$1.88 1/2 per bushel.

 

Ethanol futures finished mostly higher. The spot month May contract gained 7 cents to US$2.79 per gallon. The June contract didn't trade and finished up 5 1/2 cents to US$2.69 1/2.