January 20, 2007

 

CBOT Corn Review on Friday: Settles lower in two-sided trade

 

 

Chicago Board of Trade corn futures finished lower Friday, unable to gain much momentum from a stronger-than-expected weekly export sales report and a 2007-08 corn planted acreage estimate from a private crop forecaster, sources said.

 

March corn settled 5 1/2 cents lower to US$4.06 3/4 per bushel and May fell 4 cents to US$4.18. e-CBOT day session volume in March was 73,208 contracts.

 

The U.S. Department of Agriculture reported weekly corn export sales were a higher-than-expected 1.573.1 million metric tonnes for the week ended Jan. 11. Analysts had expected sales between 800,000 and 1.050 million tonnes.

 

At mid-session, Informa Economics estimated 2007 corn planted acreage at 85.6 million acres, well above the 78.3 million planted last year.

 

Corn futures made some very strong gains after the USDA reports last week and its time for some price consolidation, said John Kleist, senior analyst at Top Third Ag Marketing.

 

"March needs to get used to being over US$4.00," he added.

 

Corn was having trouble finding buyers at higher levels but there were buyers at the lower levels underpinning the market, a floor analyst said.

 

Despite Friday's price weakness, nearby corn futures settled at its highest level ever on weekly continuation technical charts, the analyst said.

 

The market was a little over bought and it had a pull back Friday, a floor trader said. Corn could see an additional minor pullback over the next several days, he added.

 

On daily open auction technical charts, March corn remained well above its major moving averages and with the 14-day relative strength index at 64.17.

 

Buyers on Friday included Fortis, which bought 1,000 March, Rand Financial, which bought 1,000 December, and FC Stonnee, which bought 800 July.

 

Sellers Friday included UBS which sold 500 December, JP Morgan, which sold 600 March, and FC Stonnee, which sold 300 March and 300 December.

 

Commodity fund selling was estimated at 500 contracts.

 

In options trading Dowd Wescott bought 2,000 December US$3.10 puts and sold 5,000 December US$4.90 calls.

 

Oat futures settled modestly lower as the market was influenced by the price direction in corn, a floor trader said.

 

March oats fell 3 cents to US$2.69 1/4 per bushel and May settled down 2 3/4 cents to US$2.74 3/4.

 

Ethanol futures settled slightly higher in thin trade. The February contract gained 0.009 cents to US$1.879 per gallon. The March contract, which did not trade, settled 0.005 cents higher at US$1.853 per gallon.

 

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