February 8, 2008

 

CBOT Corn Review on Thursday: Down but late soy rally supports

 

 

Chicago Board of Trade corn futures settled lower Thursday, but well above levels reached early in the session as a late rally in soybeans and position squaring ahead of Friday's U.S. Department of Agriculture report helped cut losses set earlier in the day, an analyst said.

 

March corn settled 2 cents lower at US$4.99 1/2 per bushel and December fell 3 1/4 cents to US$5.22 1/2.

 

Corn was pressured by technical weakness early in the session as follow-through selling after Wednesday's key reversal in March on daily technical charts helped lead the market lower, said Bob Anderson, an analyst at Commodity Services in Iowa. On daily open auction technical charts March settled at its lowest level since Jan. 24 and below its 10-day moving average for the first time since that day.

 

Profit-taking after recent gains added to the weak tone. Corn is not trading its fundamentals right now, "it's trading nerves," said Anderson.

 

Early activity was volatile with corn following the gyrations of nearby CBOT wheat, which ended limit up after a choppy session, a trader said.

 

The late rally in soybeans helped corn stage a recovery with position squaring ahead of Friday's U.S. Department of Agriculture supply/demand report helping corn firm in late trade, a commission house analyst said. March soybeans jumped 13 cents to settle at US$13.31 1/2 per bushel.

 

The average ending stocks estimate for the 2007-08 U.S. corn crop was 1.411 billion bushels, according to a survey of 15 analysts by Dow Jones Newswires, 27 million bushels below the 1.438 billion estimated by the U.S. Department of Agriculture in January. The report is scheduled for release at 8:30 a.m. EST (1330 GMT).

 

Price direction on Friday will depend on what the supply/demand report reveals, said Anderson.

 

In options trading, Rosenthal sold 3,000 July US$7.00 calls and UBS sold 2,000 March US$4.80 puts.

 

Oat futures finished with modest gains in "very quiet trading," with market participants rolling out of nearby March and into May the feature, a trader said.

 

March oats settled 2 cents higher at US$3.78 per bushel.

 

Ethanol futures ended mixed. March ethanol settled up 1 cent at US$2.09 per gallon while April fell 1.5 cents to US$2.085.