January 19, 2007

 

CBOT Corn Review on Thursday: Settles up but well off early highs

 

 

Chicago Board of Trade corn futures settled higher Thursday but below levels established early in the session as March was unable to trade above Wednesday's new all-time high, sources said.

 

March corn settled 4 1/4 cents higher to US$4.12 1/4 per bushel and May corn rose 3 cents to US$4.22. E-CBOT day session volume in March was 91,986 contracts.

 

Trading was extremely choppy with the lack of additional buying interest weighing on initial gains, but there was also a lack of selling interest given the demand outlook, said Vic Lespinasse of AG Edwards & Sons.

 

The market was unable to add on to its early gains and the sharp sell-off in crude oil futures added to the weakness, a floor trader said.

 

Crude oil futures were down over US$1.60 per barrel when corn closed.

 

A bull market needs to have fresh news every day and there was little in the way of fresh news Thursday, the floor trader added.

 

Light fund selling also added to the weakness in the middle of the session, but most active-March remained within the recent range established earlier in the week, the floor trader noted.

 

Corn should remain well supported through next week's State of the Union address, Lespinasse said.

 

On open auction technical charts, March corn traded within the trading range established earlier in the week and remained well above its major moving averages.

 

Buyers on Thursday included RJ O'Brien, which bought 1,000 March, Man Financial, which bought 700 March, Fortis, which bought 700 March and Tenco, which bought 600 March.

 

Sellers Wednesday included Fimat which sold 1,200 March and 1,000 July, JP Morgan, which sold 2,000 March, Tenco, which sold 1,000 December and 1,000 March, and ADM Investor Services, which sold 800 December.

 

Commodity fund selling was estimated at 2,000 contracts.

 

In options trading Man Financial bought 2,000 March US$3.80 puts and sold 2,000 March US$3.60 puts.

 

Oat futures ended with thin gains as oats were a poor follower of corn, a commission house analyst said. Fund buying in the December provided some support for prices, floor sources added.

 

March oats rose 1 1/4 cents to US$2.72 1/4 per bushel and May gained 1/2 cent to US$2.77 1/2.

 

Ethanol futures ended mostly lower in light trade. The February contract fell 6.9 cents to US$1.87 per gallon. The March contract, which did not trade, settled 1.8 cents higher at US$1.848 per gallon.

 

Friday, the U.S. Department of Agriculture is scheduled to release the weekly export sales report for the period ended Jan. 11. Analysts expect sales between 800,000 and 1.050 million metric tonnes.

 

Friday afternoon, the Commodity Futures Trading Commission is scheduled to release the commitment of traders' data for the period ending Jan. 16.