February 22, 2008

 

CBOT Corn Review on Thursday: Settles higher; deferred months lead

 

 

Chicago Board of Trade corn futures ended higher Thursday after a choppy trading session.

 

May corn settled 1 1/2 cents higher at US$5.37 1/2 and Dec rose 5 cents to US$5.53.

 

The corn market played tag with the crude oil market for most of the day, said a commission house analyst. Wherever the price of crude oil went, corn followed, he said.

 

The release of the 2008-09 corn planted acreage estimate of 90 million acres in the U.S. Department of Agriculture's Outlook Forum was above the 88 million acres projected in early February in the USDA's baseline projection. However, several traders noted it was an estimate and enough time remains for farmers to change their planting decisions.

 

Corn rebounded in late trade as crude oil slashed its losses with deferred corn contracts rallying on ideas that acreage will need to increase given the expanded use of corn by the ethanol industry, an analyst said. Several deferred contracts set new life-of-contract highs.

 

The USDA estimated 2008-09 ethanol demand at 4.1 billion bushels.

 

Strong precious metals prices helped supply support on spillover "inflationary" type buying with silver futures making 27-year highs.

 

Position evening near the close added to the late strength as participants didn't want to be short going into the second day of the USDA Forum, a trader said.

 

On daily open auction technical charts, open auction March remained well above its major moving averages and ended at another new high close.

 

Market direction Friday will be influenced by what happens in overnight trade, news from the USDA at the forum and outside market influence, a trader said.

 

In options trading, MF Global bought 4,000 April US$5.00 puts and JP Morgan bought 1,000 December US$6.20 calls and sold 1,000 December US$5.20 calls.

 

Oat futures settled sharply higher as speculative and options related buying boosted prices with December setting another new all-time high, an analyst said.

 

December oats traded as high as US$4.21 1/4 per bushel in electronic trade, a new all-time high.

 

March oats settled 8 3/4 cents higher at US$3.83 3/4 per bushel and Dec finished up 9 cents at US$4.17.

 

Ethanol futures ended lower. March ethanol fell 1.7 cents to US$2.273 per gallon and April declined 3.7 cents to US$2.26.

 

Friday, the weekly export sales repot is scheduled for release at 8:30 a.m. EST. Analysts expect corn export sales between 450,000-to-1.0 million metric tonnes for the week ended Feb. 14. The report was delayed a day due to the holiday.