February 12, 2008

 

CBOT Corn Review on Monday: Ends lower but near session highs

 

 

Chicago Board of Trade corn futures settled lower but near session highs as short covering late in the day helped corn rebound from steep losses set earlier.

 

March corn settled 4 1/2 cents lower at US$5.03 1/2 per bushel, and December fell 4 3/4 cents to US$5.25 1/4.

 

Initially, corn was pressured by follow-through selling from Friday's late weakness as well as from overnight losses, said Jason Britt, broker/analyst at Central States Commodities.

 

Technical weakness after last week's key reversal added more downward pressure, a commission house analyst said. Steep losses set in wheat futures in very volatile trade also added downside pressure, the analyst noted.

 

CBOT March wheat, which traded 60 cents higher at its new upper level price limit, reversed course and ended down 48 cents at US$10.45 per bushel and traded within a US$1.13 range.

 

Near the close, however, corn drew support from the unwinding of wheat/corn spreads near the close, a trader said.

 

A rally in crude oil futures provided outside market support, the trader added. Crude oil was trading around US$2 a barrel higher when corn closed.

 

In open auction trading, commodity fund selling was estimated at 6,000 contracts.

 

On daily technical charts, March traded below both its 10- and 20-day moving averages but settled above both.

 

Market direction on Tuesday will depend on what happens in spring wheat futures overnight and what the outside markets do, a trader said.

 

In options trading, MF Global bought 2,000 March US$5.20 calls and bought 1,000 March US$5.00 calls. Tenco bought 1,000 December US$5.30 calls and sold 1,000 December US$6.50 calls and sold 1,000 December US$4.60 puts.

 

Oat futures settled lower but well above earlier levels in two-sided trade. March and May oats established new life-of-contract highs but spillover losses from the other grains pushed oats lower, an analyst said.

 

March oats fell 6 cents to US$3.44 per bushel.

 

Ethanol futures settled higher. March ethanol gained 3.3 cents to US$2.143 per gallon, and April rose 2.8 cents at US$2.138.