January 8, 2008

 

CBOT Corn Review on Monday: Down on soy, wheat losses, lower crude oil

 

 

Chicago Board of Trade corn futures ended with fractional losses Monday, undermined by weakness in the other grains and heavy losses in crude oil futures, an analyst said.

 

March corn settled 1/2 cent lower at US$4.66 1/4 per bushel.

 

CBOT March wheat settled 28 1/2 cents lower to US$9.03 per bushel, March soybeans ended down 12 3/4 cents to US$12.49 3/4 per bushel and nearby crude oil dropped US$2.79 per barrel to US$95.12.

 

Better-than-expected weather in Argentina over the weekend and forecasts for rain near week's end also limited buying interest in corn as did profit taking after the recent rally, a trader said.

 

Light fund buying near the close, thought to be index funds rebalancing their portfolios to include more corn, helped supply late support, said Joe Bedore, floor manager at FC Stonnee.

 

The absence of fresh news kept corn in the role of a follower of other markets for most of the session, with some participants trimming their positions ahead of Friday's U.S. Department of Agriculture reports, a commission house analyst said. The decline in crude oil kept corn on the defensive with corn's role in ethanol production, the commission house analyst added.

 

Weekly corn export inspections were below expectations but had little impact on corn. The USDA reported that corn inspected for export totaled 31.344 million bushels for the week ended Jan. 3, below the 40-45 million bushels expected by analysts.

 

Overall it was a fairly light trading session as it looks like people are waiting on Friday's report, the commercial analyst said.

 

In open-auction trading overall commodity fund selling was estimated between 1,000 and 2,000 contracts.

 

On daily technical charts, electronically traded March corn remained above its major moving averages but traded an "inside day," between the high and low established in Friday's session.

 

Price direction Tuesday depends on what happens in energy and the other outside markets, an e-cbot trader says.

 

In options trading, Tenco bought 1,500 July US$4.80 calls and sold 1,500 July US$5.30 calls and sold 1,500 July US$4.50 puts. RJ O'Brien bought 1,000 May US$4.20 puts.

 

Oat futures settled lower in light trade with the market experiencing a "rest day" ahead of the USDA reports on Friday, an analyst said. March oats did set another fresh life-of-contract high but oats are following corn more than any other grain and corn ended lower on the day, the analyst said.

 

March oats settled 3 1/4 cents lower at US$3.26 1/2 per bushel.

 

Ethanol futures ended lower. February ethanol declined 4 cents to US$2.14 per gallon while March fell 6 cents to US$2.07.