January 11, 2008

 

CBOT Corn Review on Thursday: Lower; consolidates before USDA reports

 

 

Chicago Board of Trade corn futures settled with mild losses Thursday with some participants evening up their positions before the U.S. Department of Agriculture's annual crop production, stocks and supply/demand reports Friday, analysts said.

 

The USDA is scheduled to release the reports at 8:30 a.m. EST (1330 GMT).

 

March corn settled down 2 1/4 cents at US$4.75 per bushel.

 

"It was basic consolidation before the reports," said John Kleist of Kleist Ag Consulting. Early technical selling pressured corn, but prices held above support as "no one wanted to press the short side of the market ahead of the reports," Kleist said.

 

The average production estimate for the 2007-08 U.S. corn crop was 13.109 billion bushels, according to a survey of 19 analysts by Dow Jones Newswires, 59 million bushels below the 13.168 billion estimated by the U.S. Department of Agriculture in November. The average yield estimate for the 2007-08 crop was 152.3 bushels per acre, according to 15 analysts surveyed, compared to the 153.0 bushels estimated in November.

 

The average quarterly corn stocks estimate as of Dec. 1 is 10.550 billion bushels, according to a survey of 13 analysts. Stocks as of Dec. 1 2006 totaled 8.933 billion bushels.

 

Weaker crude oil prices also limited the upside in corn, but the market is looking ahead to Friday, an e-cbot trader said.

 

Weekly corn export sales were near the lower end of analyst estimates, but this week's daily export sales announcements offset the report, said Kleist.

 

Before the opening of day session trading, the USDA announced a sale of 120,000 metric tonnes of U.S. corn to unknown destinations with 60,000 for delivery in 2007-08 and 60,000 tonnes for delivery in 2008-09.

 

Corn's price direction on Friday will depend on the reports but the market is expecting "friendly numbers," the e-cbot trader said.

 

On daily technical charts, electronically traded March corn remained above its major moving averages.

 

In open auction trading, commodity funds were net sellers of 2,000 contracts.

 

In options trading, MF Global bought 5,000 February US$4.50 puts and sold 5,000 February US$4.30 puts.

 

Oat futures ended with thin losses despite light fund buying as commercial selling and position evening ahead of Friday's USDA reports limited the upside, a trader said.

 

March oats settled 1/2 cent lower at US$3.27 per bushel.

 

Ethanol futures ended lower. February ethanol fell 9 cents to US$2.12 per gallon while March slid 5 1/2 cents to US$2.075.