January 9, 2007

 

CBOT Corn Review on Monday: Settles lower in choppy trade

 

 

Chicago Board of Trade corn futures finished lower in choppy trading Monday, unable to establish any positive momentum, trade sources said.

 

March corn fell 4 3/4 cents to US$3.63 1/2 per bushel and May corn declined 4 1/2 cents to US$3.73 1/4. The e-CBOT day session volume in March was 57,503 contracts.

 

Futures opened lower following the tonnee established in overnight trade and remained below Friday's settlement prices. The market currently lacks any features, with people waiting on Friday's U.S. Department of Agriculture reports for direction, a floor analyst said.

 

In addition, the outside markets didn't provide much support, with crude oil retreating from higher levels to trade lower for much of the session, he added.

 

The market remains sensitive to the outside markets and cash corn is beginning to move, said Jason Britt, an analyst with Central States Commodities in Kansas City, Mo.

 

Export inspections were weaker than expected but had little impact as the holiday impacted exports, he said.

 

The USDA reported that corn inspections as of Jan. 4 totaled 22.011 million bushels, well below the 34 million to 42 million bushels expected by analysts.

 

People are also waiting on the reallocation of index fund positions for the New Year, but that might have already occurred, another floor trader said.

 

At these price levels it might be hard to expect a lot of follow-through on Tuesday, Britt noted.

 

On open auction technical charts, March corn traded an inside day, within the high and the low established in Friday's range. The 14-day relative strength index in March is 42.59.

 

Buyers Monday included Tenco, which bought 300 December and 200 March; Rand Financial, which bought 300 December; and FC Stonnee, which bought 200 July and 200 December.

 

Calyon sold 1,000 March, Man Financial sold 1,000 March, Rosenthal sold 600 December and Kottke sold 800 December.

 

Overall commodity fund selling was estimated at 4,000 contracts.

 

In options trading, UBS bought 2,500 March US$3.80 calls, sold 850 March US$3.60 calls and sold 850 March US$3.60 puts.

 

Oat futures ended modestly lower, dragged down by the weakness in corn, floor sources say. Light fund buying in May helped limit the losses, they added.

 

March oats settled 1 cent lower at US$2.60 3/4 per bushel, and May fell 1 1/4 cents to US$2.68 1/4.

 

Ethanol futures settled mixed in quiet trade. The February contract ended 1.1 cents lower to US$2.249 per gallon while the March contract, which didn't trade, settled 2.8 cents to US$2.103.

 

Monday afternoon, the Commodity Futures Trading Commission is scheduled to release the commitment of traders' data for the period ending Jan. 2. The report was delayed a day due to the New Year's holiday.