February 23, 2008

 

CBOT Corn Review on Friday: Lower on outlook forum news, speculative selling

 

 

Chicago Board of Trade corn finished lower Friday, pressured by news from the U.S. Department of Agriculture's Outlook Forum, an analyst said.

 

March corn settled 2 1/4 cents lower at US$5.22 1/4 per bushel, May fell 2 1/2 cents to US$5.35, and December declined 2 3/4 cents at US$5.50 1/4.

 

Corn was under pressure early as the USDA's 2008-09 ending stocks figure was larger than anticipated by the market, and encouraged speculative selling, said Vic Lespinasse, analyst at Illinois Grain.

 

The USDA pegged 2008-09 corn ending stocks at 1.243 billion bushels, but some participants expected a figure 50 to 100 million bushels less, said Lespinasse. In addition, weakness from lower outside markets added to the poor tonnee.

 

Nearby crude oil ended moderately higher after trading lower, and gold settled modestly lower but well above earlier levels.

 

A rally near midday on spillover from stronger soybean and wheat prices helped staunch the losses, but options-related selling in March kept the market on the defensive, a commission house analyst said.

 

Despite a late rally in CBOT wheat to session highs and sharply higher MGE wheat futures, speculative selling kept the corn market on the defensive near the close, the commission house analyst said.

 

In open-auction trading, commodity fund selling was estimated at 3,000 contracts.

 

On daily open-auction technical charts, May corn traded an "inside day," between the high and low established in Thursday's trade.

 

In options trading, MF Global bought 3,000 April US$5.00 puts and sold 3,000 July US$7.00 calls.

 

Market direction Monday depends on what the speculative funds want to do, crude oil futures prices and any financial news, an analyst said.

 

Oat futures ended with modest gains in quiet trade, with spread trading the feature, an analyst said. Spillover from higher wheat prices also supplied support, the analyst said.

 

March oats settled 1/4 cent higher at US$3.84 per bushel and May ended up 1 cent at US$3.95.

 

Ethanol futures lower. March ethanol slipped 1 cent to US$2.263 per gallon, and April also ended 1 cent lower to US$2.25.