CBoT corn futures up

Corn futures at the Chicago Board of Trade rallied more than 2 percent on Thursday, with investors favouring bullish implications from outlooks for hot weather in the US Midwest crop region instead of bearish input from updated corn stocks data, traders said.
"The midday forecasts reaffirmed what we knew this morning, that it was going to be hot and dry next week," said Jerry Gidel, analyst for North America Risk Management Inc "Corn wants to go down, but it can't with the hot weather talk around," a trader said.
CBoT corn closed 1-3/4 to 9-3/4 cents per bushel higher, with July up 8 at $3.44 per bushel. New-crop December was up 9-3/4 at $3.65-1/4 per bushel. Traders said corn/wheat spreading and fund buying boosted corn futures, but the key fundamental input was the weather worry.
"Moderate drought conditions are being reported from Minneapolis to north-western Iowa, and through increased parts of Indiana, Ohio and Michigan, as rainfall remains limited in these areas," said Joel Widenor, forecaster for Cropcast Agricultural Weather.
The pockets of dryness, combined with the threat of yield-robbing heat next week, kept away aggressive selling of corn futures.
The US corn crop will be in its later stages of pollination by next week, but hot weather then could still trim some production from the 2007 US corn crop. A huge increase in US corn acreage this year and good crop weather in the US Midwest that got the crop off to a quick start were boosting corn growth and development, leading to outlooks for a record large corn crop this year.
The US Agriculture Department early Thursday pegged this year's US corn production at a record 12.84 billion bushels, above the previous record of 11.8 billion but below an estimate by Informa Economics last week for 13.375 billion bushels.
Corn/wheat spreading and spillover support from a rally in soy also helped give corn futures some buoyancy, despite the release of bearish corn stocks numbers by the USDA.
USDA in its July supply/demand report pegged new-crop 2007/08 US corn ending stocks at 1.502 billion bushels, above an average of analysts' estimates for 1.383 billion and above USDA's forecast in June for 997 million.
The new crop year will end in August 2008. USDA also boosted to 1.137 billion bushels its estimate for old-crop 2006/07 corn stocks at the end of this August. In June, USDA had forecast old-crop corn stocks at 987 million bushels.
USDA's weekly export sales report early Thursday showed US corn export sales last week at 1,501,100 tonnes, above estimates for 700,000 to 900,000 tonnes. Tumbling corn prices late this spring and early summer amid the prospects for a huge corn crop this year were bringing in fresh demand for corn from overseas buyers. Deliveries of corn on the July contract totalled 555 lots, with Rand and J.P. Morgan customers stopping most of the corn. Oat futures closed unchanged to up 2-1/2 cents per bushel, with July up 1 at $2.90.