August 4, 2006

 

CBOT Corn Review on Thursday: Lower on U.S. midwest rains, fund selling

 

 

Corn futures settled modestly lower Thursday as rain in parts of the US corn belt overnight and extending the day weighed on futures, sources said.

 

September corn settled 2 1/4 cents lower at US$2.45 per bushel, and December also fell 2 1/4 cents to US$2.62.

 

Day time e-CBOT volume totaled 6,000 contracts in September and 22,079 contracts in December.

 

In addition to the rains, light fund selling also added to the weakness with conflicting near-term weather models keeping speculative buyers on the sidelines, said Vic Lespinasse, of AG Edwards & Sons.

 

The market also appeared to be following a wetter forecast model, he added.

 

The midday weather forecasts were basically unchanged from earlier outlooks, said John Dee, a meteorologist with Global Weather Monitoring. It should be warmer than average and drier than average heading into next week with some opportunities for rainfall. One weather model does indicate a stronger push of cooler air moving into the region next week, but its believability is low as the other weather models didn't confirm it, he added.

 

The larger than anticipated production and yield estimate from FC Stonnee on Wednesday also contributed to the price weakness, Lespinasse added.

 

Better-than-expected weekly export sales had little impact with the USDA reporting sales of 1,602.1 million metric tonnes for the week ended July 27. Included in this total were sales of 702,000 tonnes for delivery in 2006-07.

 

On open auction only technical charts, December corn traded an inside day, within the highs and lows established in Wednesday's session.

 

Buyers Thursday included FC Stonnee which bought 500 December, JP Morgan bought 1,000 December, and Fimat bought 300 September and 200 December.

 

Sellers Thursday included FC Stonnee, which sold 800 December, Calyon sold 600 December, ABN Amro sold 500 December, Man Financial sold 600 December, and Rand Financial sold 500 December and 300 March.

 

Commodity fund selling was estimated at 4,500 contracts.

 

Oat futures finished lower as the market continued its recent role as a follower with the weakness in corn helping to keep futures on the defensive, a local trader said.

 

September oats lost 2 1/2 cents to US$1.88 per bushel while December contract declined 2 1/4 cents to US$1.96.

 

Ethanol futures settled mixed in light trade with the nearby months gaining on the deferred contracts. August gained 7 cents to US$2.55 cents per gallon and September ended 2 cents higher at US$2.55.

 

Trade sources indicate that Informa Economics is scheduled to release its estimate of corn and soybean production and yields sometime before the opening of day session activity.

 

Friday afternoon, the Commodity Futures Trading Commission is scheduled to release the weekly commitment of traders report for the period ending Aug. 1.