March 6, 2008

 

CBOT Corn Review on Wednesday: Higher; shrugs off soy weakness

 

 

Chicago Board of Trade corn futures settled higher Wednesday but below levels established earlier in the session as profit-taking and a late sell-off in soyoil and soybeans helped trim gains.

 

May corn settled 12 1/2 cents higher at US$5.67, and December ended up 10 cents at US$5.77 1/4.

 

Earlier, corn traded at near limit-up levels boosted by soaring energy and precious metals prices and short covering after Tuesday's declines. Nearby crude oil traded over US$5.00 per barrel higher at one point and was over US$4.25 per barrel higher when corn closed.

 

The strength helped July corn set another all-time high for any month at US$5.86 1/2 per bushel.

 

The rally in outside inflationary markets helped reverse the declines made Tuesday, said Don Roose, president of US Commodities.

 

A steep slide in soyoil prices with several months falling to limit-down, or 200 points lower, led to a reversal in soybeans with corn's gains also coming under pressure. However, late fund buying helped corn rebound into the close, a commission house analyst said. It looked like some participants were buying corn and selling soybeans, a trader said.

 

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

 

On daily open-auction technical charts, May corn settled at a new high and above its major moving averages.

 

In options trading, Tenco bought 1,000 July US$7.00 calls and Rand bought 1,000 May US$5.00 puts

 

Market direction Thursday will be determined by overnight Asian news, what happens in the "outside" commodity markets and the weekly export sales report, an analyst said.

 

The U.S. Department of Agriculture is scheduled to release the weekly export sales report at 8:30 a.m. EST. Analysts expect corn sales for the week ended Feb. 28 between 600,000 to 950,000 metric tonnes.

 

Oat futures settled modestly higher but well below levels set earlier in the session. Light fund buying underpinned prices earlier in the day, but the sell-off in soybeans and soyoil put downward pressure on prices, an analyst said. May oats settled 1 1/4 cents higher at US$4.28 per bushel.

 

Ethanol futures ended mixed. March ethanol fell 4.6 cents to US$2.354 per gallon and April gained 6 cents at US$2.378.