July 18, 2007

 

CBOT Corn Review on Tuesday: Lower; US midwest weather forecasts weigh

 

 

Chicago Board of Trade corn futures ended settled sharply lower for the second straight session as midday weather forecasts increased the chance for rain in the short-term for parts of the U.S. Midwest, analysts said.

 

September corn declined 12 1/4 cents to US$3.22 1/2, December dropped 11 3/4 cents to US$3.36 3/4 and March fell 10 1/2 cents to US$3.51 1/4.

 

The midday forecast increased the chance for rain in the western U.S. Midwest, pressuring the market lower, said Brian Hoops, president of Midwest Market Solutions in Yanktonne, S.D. Steep losses in soybean futures added additional pressure to corn, Hoops said.

 

November soybeans fell 38 1/4 cents to US$8.60 1/2 per bushel.

 

Midday weather forecasts added in the potential for moisture in dry areas of the western U.S. Midwest than in previous forecasts, said Joel Burgio, of DTN Meteorologix Weather. The western areas of the region are expected to receive 0.30-1.50 inches of rain through Thursday, Burgio said.

 

Technical selling with December falling below support at US$3.36 also added to the downward slide, Hoops said. December traded to its lowest level since last November.

 

Continued long liquidation that began Monday continued with the wetter forecasts, a commission house analyst said.

 

Commodity fund selling was estimated at 15,000 contracts. If the weather forecast is accurate, there can't be too many weather events left to impact the U.S. corn crop, the analyst added.

 

Although Monday's crop progress report had a larger-than expected decline in conditions, the market expects the rain this week to make up for the losses, a floor trader said.

 

In open auction trading, FC Stonnee bought 1,000 September and JP Morgan bought 1,000 May and 1,000 July. Man Financial sold 1,500 December and 700 March.

 

In options trading, JP Morgan sold 2,000 December US$3.60 puts, 1,000 July US$3.50 puts and 1,000 May US$3.40 puts.

 

Oat futures settled lower as early fund selling pressured the market, though the market held up pretty well considering the losses in the other grains, an analyst said. Oats were supported after the opening by JP Morgan buying March and selling March put options, the analyst said.

 

Sep dropped 2 1/4 cents to US$2.48 3/4 per bushel and Dec slid 3 1/4 cents to US$2.52, and Mar fell 2 cents to US$2.62 1/2.

 

Ethanol futures ended with modest losses in light trade. August ethanol settled .003 cent lower to US$1.993 per gallon and September fell 1 cent to US$1.91.