March 13, 2008

 

CBOT Corn Review on Wednesday: Down, consolidates recent gains

 

 

Chicago Board of Trade corn futures ended lower Wednesday, consolidating in the absence of fresh news.

 

May corn settled 5 1/4 cents lower at US$5.67 1/4 per bushel, July fell 5 cents to US$5.79 1/2, and December declined 6 1/2 cents to US$5.79.

 

The market experienced some long liquidation after recent price strength, said Don Roose, president of U.S. Commodities. Corn has hit some fundamental resistance and may need to wait until the planting intentions report and what the early spring weather forecast is before making any new highs, said Roose.

 

Corn consolidated in thin trade influenced by the weakness in soybeans, a commission house analyst said. May soybeans fell 12 3/4 cents to US$13.95 per bushel.

 

The unwinding of long corn/short wheat spreads also added to the downside pressure, the analyst said. May wheat settled 59 1/2 cents higher at US$12.82 1/2, the highest close ever recorded for a CBOT May wheat contract.

 

Corn took little notice of the "outside" markets Wednesday, with crude oil reversing course to trade above US$110 per barrel. Nearby crude oil settled at of US$109.92 per barrel, a new high.

 

All things considered however, it was a fairly quiet session, a trader said.

 

Corns price direction Thursday will be determined by what happens in overseas markets, export sales and any economic news, the trader said.

 

The U.S. Department of Agriculture is scheduled to release the weekly export sales report at 8:30 a.m. EDT. Analysts forecast sales between 600,000 to 1.0 million metric tonnes.

 

In open auction trades, commodity fund selling was estimated at 4,000 contracts.

 

On daily open auction technical charts, May corn traded an "inside" day, between the high and low range established Tuesday, but settled above its major moving averages.

 

In options trading, Tenco bought 800 December US$6.00 calls and sold 800 December US$7.00 calls. Fortis bought 1,500 May US$6.00 calls and sold 1,500 July US$5.60 calls.

 

Oat futures ended mixed in very light trade, with the lack of news limiting interest "as a bull market has to be fed every day," a trader said.

 

May oats settled 3/4 cent lower at US$4.01 3/4 per bushel.

 

Ethanol futures settled higher. April ethanol rose 4.2 cents to US$2.450 per gallon and May gained 5.5 cents to US$2.449.