January 31, 2008

 

CBOT Corn Review on Wednesday: Lower on spillover before federal news

 

 

Chicago Board of Trade corn futures settled lower Wednesday, pressured by spillover declines in wheat in light trade, an analyst said.

 

March corn settled 2 1/2 cents lower at US$4.98 1/2 per bushel, and December slipped 3/4 cent to US$5.10. CBOT March wheat settled 21 1/2 cents lower at US$9.22 1/2 per bushel.

 

Light soybean/corn spreading also weighed on corn, but another feature was the lack of buying interest ahead of the Federal Reserve and its decision on interest rates, said Rick Alexander, vice president of trading at Zaner Group in Chicago.

 

After the close, the Fed announced a cut in the federal funds rate target of 50 basis points to 3% and the discount rate of 50 basis points to 3.5%.

 

The move by the Fed should be positive for equities, with the grains higher in sympathy Thursday, a trader said. In addition, lowering interest rates should weaken the U.S. dollar versus other currencies, making U.S. grain more attractive to foreign buyers, the trader said.

 

Recent price support in corn was due to outside commodity market influence, but there was little direction from crude oil or precious metals, a floor analyst said.

 

Commodity fund selling in open auction trading was estimated at 3,000 contracts.

 

In options trading, Rand Financial sold 1,000 May US$5.00 calls and 1,000 May US$5.00 puts.

 

Oat futures ended little changed in modest activity. Participants rolled out of March positions and into May, a trader said.

 

March oats settled 1 1/4 cents lower at US$3.23 per bushel.

 

Ethanol futures settled mixed. February ethanol finished up 1.5 cents at US$2.195 per gallon while March slipped .002 cent to US$2.108.

 

In other corn news, the U.S. Department of Agriculture is scheduled to release the weekly export sales report for the week ended Jan. 24 at 8:30 a.m. EST on Thursday. Analysts expect weekly corn sales between 900,000 to 1.5 million metric tonnes.