March 14, 2008

 

CBOT Corn Review on Thursday: Higher but profit-taking cuts gains

 

 

Chicago Board of Trade corn futures settled higher Thursday but well below levels set near the opening on speculative buying and spillover from higher "outside" inflationary markets, an analyst said.

 

May corn settled 2 1/4 cents higher at US$5.69 1/2 per bushel, July rose 2 cents to US$5.81 1/2, and December gained 4 1/4 cents to US$5.83 1/4.

 

"Crude oil was higher early in the session helping anything connected to energy, including corn, to trade higher," said Brian Hoops, president of Midwest Market Solutions. The lack of wheat/corn spreading which weighed on the market Wednesday also added support, said Hoops.

 

Talk that a private consulting firm would release its planted acreage estimate Friday was also supportive on ideas that acreage would be lower than earlier indications, a commission house analyst said.

 

Better-than-expected weekly corn export sales also provided some support, a trader said. The U.S. Department of Agriculture reported weekly corn export sales were 1.226 million metric tonnes, including 457,200 tonnes sold for delivery in the 2008-09 crop year. Analysts had expected sales between 600,000 to 1.0 million metric tonnes.

 

However, corn was unable to maintain its early gains as a retreat in crude oil to lower levels after making a new all-time high and a rebound in equities to higher levels pressed the market. It appeared the rebound in equities led speculative money out of commodities and back into stocks, the commission house analyst said.

 

Corn's price direction Friday will depend on what happens in overnight markets and the impact of the private acreage survey, the commission house analyst said.

 

In open auction trades, commodity fund buying was estimated at 2,000 contracts.

 

On daily open auction technical charts, July corn matched its all time high of US$5.91 per bushel and remained above its major moving averages.

 

In options trading, Iowa Grain bought 4,500 May US$5.60 calls, and sold 4,500 May US$6.60 calls and 4,500 May US$5.40 puts.

 

Oat futures settled mixed as a lack of buying interest after midsession helped pressure prices, an analyst said. The market rallied on spillover from the other markets but when the gains in the other grains faded so did the rally in oats, the analyst said.

 

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

 

Ethanol futures ended mixed. April ethanol gained 3.8 cents to US$2.488 per gallon but May slipped 0.009 cent to US$2.440.