July 20, 2007

 

CBOT Corn Review on Thursday: Settles down on overnight U.S. midwest rain

 

 

Chicago Board of Trade corn futures ended lower Thursday as rainfall overnight in dry areas of the U.S. Midwest kept prices on the defensive from the opening bell, analysts said.

 

September corn settled down 5 3/4 cents at US$3.21 1/4 per bushel, December fell 6 1/4 cents to US$3.36 1/4, and March ended down 5 3/4 cents at US$3.51 3/4.

 

The weather continued to be the feature, analysts said. "It was a million dollar rain for eastern Nebraska and western Iowa farmers," a commission house analyst said.

 

"Corn grinded lower as dry areas of the U.S. Midwest have gotten smaller due to the recent rain," said Joe Bedore, floor analyst with FC Stonnee.

 

Midday weather updates revealed no significant changes to earlier forecasts, which predicted warmer, drier weather in parts of the Midwest in the coming week, a trader said.

 

Speculative technical selling added to the losses with December trading below support levels. Commodity fund selling was estimated at 4,000 contracts.

 

Liquidation of long positions continued to weigh on the market with participants exiting previously entered positions, an analyst said.

 

Late strength in soybeans had little effect on corn, though end-user buying helped corn settle near midrange, traders said.

 

Weekly corn export sales released before the day session opening were slightly above expectations but had little impact.

 

The U.S. Department of Agriculture reported weekly corn export sales were 1.168 million metric tonnes, above the 550,000- to 1.05 million-tonne expected by analysts.

 

Prices on Friday should easily find support as traders square their positions before the weekend and as midterm forecasts predict warmer, drier weather through the weekend, said Jason Britt, analyst with Central States Commodities.

 

In open auction trading, ADM Investor Services bought 1,400 December 2008 and Fimat sold 700 December.

 

In options trading, JP Morgan bought 2,000 December US$3.10 puts. FC Stonnee bought 1,000 December US$3.50 calls and sold 2,000 December US$4.00 calls.

 

On daily technical charts, electronically traded December traded an "outside day" above and below the range established Wednesday.

 

Oat futures ended sharply lower as "tremendous fund liquidation" pushed prices lower, an analyst said. The ownership of the market changed with commercials buying at lower levels, he said.

 

September fell 8 1/2 cents to US$2.38 1/2 per bushel, December fell 9 cents to US$2.42 1/4, and March fell 8 cents to US$2.53 1/4.

 

Ethanol futures finished with modest declines. August ethanol fell 2.3 cents lower to US$1.990 per gallon and September slipped .01 cent to US$1.943.

 

On Friday, the Commodity Futures Trading Commission is scheduled to release the weekly commitments of traders report for the period ended July 17.