January 18, 2008

 

CBOT Corn Review on Thursday: Mixed; fades on soy weakness

 

 

Chicago Board of Trade corn futures ended mixed Thursday, unable to maintain early strong gains in a choppy, two-sided session.

 

March corn finished 1/2 cent lower at US$5.02 per bushel, and new crop December ended down 1/4 cent lower at US$5.21.

 

The market wasn't able to remain positive despite positive news and that is a huge worry, said Don Roose, president of U.S. Commodities in West Des Moines, Iowa.

 

Prices rallied to the upside at the opening, buoyed by sharp advances in both soybeans and wheat, with CBOT wheat futures trading limit-up at 30 cents higher.

 

Strong weekly export sales and spillover from overnight strength also added to the tonnee. Export sales were 2.369 million metric tonnes for the week ended Jan. 10, a marketing-year high.

 

However, the inability of soybeans and CBOT wheat to maintain their gains led to a retreat in corn, a commission house analyst said. March soybeans settled 6 cents lower at US$12.71 per bushel after trading as high as US$13.12. CBOT March wheat finished 14 cents higher at US$9.40 1/2 after reaching as high as US$9.56 1/2.

 

It appears that the market has reached an intermediate top technically and is trying to break down, Roose said.

 

Early commodity fund buying dried up, crude oil broke to lower levels and equity markets sold off, raising fears of a recession, an analyst said. Given those concerns, it appears that participants took some profits and headed to sidelines, the analyst said.

 

Corn's price direction Friday will depend on the direction of the outside markets and what happens to soybeans, a trader said.

 

Commodity funds buying and selling were even on the day.

 

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

 

In options trading, Tenco bought 2,000 March US$5.40 calls. JP Morgan bought 1,000 December US$5.20 calls and sold 1,000 December US$6.20 calls.

 

Oat futures finished mostly higher with thin fund buying in the deferred months providing support, though late weakness in corn weighed on the market, a trader said.

 

March oats settled 1/2 cent higher at US$3.22 per bushel.

 

Ethanol futures ended higher. February ethanol closed up 3.5 cents at US$2.22 per gallon while March closed 2.2 cents higher at US$2.17.