January 29, 2008

 

CBOT Corn Review on Monday: Higher on wheat, outside market rally

 

 

Chicago Board of Trade corn futures finished with modest gains in relatively quiet trading Monday, buoyed by the sharp gains in wheat futures and outside markets, a commission house analyst said.

 

March corn settled 4 cents higher at US$5.02 1/4 per bushel, December gained 3/4 cent to US$5.10 1/2.

 

The market came under pressure early in the session on concerns of an equity market sell-off after overnight losses in Asia and sharp losses in crude oil futures, the commission house analyst said. However the lack of a steep sell-off in the U.S. stock market coupled with a move to new all-time highs in gold futures helped stem the losses, the analyst said.

 

A slow rebound to higher levels in crude oil also supplied support as crude oil rebounded from steep losses to end the day at higher levels.

 

Additional gains occurred after CBOT and KCBT wheat rallied to their 30 cent trading limit late in the session following the lead of MGE spring wheat futures, the analyst added. Minneapolis wheat settled 30 cents higher at US$12.97 per bushel, another new all-time high.

 

After the initial weakness failed to take hold it was a "buy commodities" type session, a trader said.

 

A much larger-than-expected export inspections estimate also added support, an electronic trader said. The U.S. Department of Agriculture reported that corn inspected for export for the week ended Jan. 24, totaled 61.094 million bushels. This was well above the 39-48 million bushels expected by analysts and one of the largest amounts on record, the electronic trader said.

 

Price direction for corn on Tuesday will depend on what occurs in the outside markets, the electronic trader said.

 

On daily technical charts, electronically traded March corn settled above its 10-day moving average and corn settled at its highest level since January 16.

 

In options trading, FC Stonnee bought 1,000 March US$5.30 calls and sold 1,000 March US$4.70 puts. Newedge sold 500 March US$5.00 calls.

 

Oat futures ended higher in quiet trade, boosted by the influence of the wheat market which supported all of the grains, an analyst said.

 

March oats settled 2 3/4 cents higher at US$3.23 per bushel.

 

Ethanol futures ended lower. February ethanol closed down 2.2 cents at US$2.18 per gallon while April closed 1 cent lower at US$2.09.