January 16, 2008

 

CBOT Corn Review on Tuesday: Lower; late profit-taking weighs

 

 

Chicago Board of Trade corn futures finished lower Tuesday in a choppy, two-sided session.

 

New life-of-contract highs and fresh 12-year highs were established early in the session on light speculative buying. However, corn consolidated some of its recent gains as light profit-taking near the close weighed on prices.

 

March corn settled 3 cents lower at US$5.09 per bushel and new crop December finished 1 1/2 cents lower at US$5.29.

 

The feature was in the new crop contracts, said Bob Anderson, an analyst at Commodity Services in Des Moines, Iowa. The battle for acreage between corn and soybeans this spring continues, Anderson said.

 

November soybean futures were up sharply and December corn traded higher for much of the day in an effort to keep prices high enough to encourage corn plantings this spring, said Anderson. November soybeans rose 22 cents to US$12.85 per bushel.

 

Light new crop/old crop spreading limited the upside in the nearby months, said Anderson.

 

Light speculative selling also weighed on the market. In open auction activity, speculative fund selling was estimated at 3,000 contracts.

 

"A bull market has to be fed every day and there wasn't much to feed corn with," a commission house analyst said.

 

Lower crude oil futures limited some buying interest, a trader said. February crude oil was down more than US$2.50 per barrel when corn closed. Considering the weakness in crude oil prices, however, corn held up "fairly well," the trader said.

 

Price direction Wednesday will depend on what happens in the overnight session, weather forecasts for South America and outside market price direction, an electronic trader said.

 

On daily technical charts, open auction March corn traded an outside day, above and below the high and low established in Monday's trade and partially filled on the downside an upside gap created between Monday's and Friday's session.

 

In options trading, Rand Financial bought 1,500 December US$4.70 puts, purchased 2,000 March US$4.50 puts and bought 2,000 March US$4.00 puts.

 

Oat futures settled lower as thin commercial selling and light profit taking in the absence of fresh news weighed on prices, an analyst said.

 

March oats settled 1 cent lower at US$3.29 1/2 per bushel.

 

Ethanol futures ended lower. February ethanol closed down 2 cents at US$2.25 per gallon while March closed 5 cents lower at US$2.18.