March 16, 2007

 

CBOT Corn Review on Thursday: Settles lower on technical, fund liquidation

 

 

Chicago Board of Trade corn futures settled lower Thursday, near their session lows, unable to hold early gains as a lack of follow-through buying led some participants to liquidate positions, floor traders said.

 

May corn declined 7 3/4 cents to US$3.97 3/4 per bushel, July ended 6 1/4 cents lower to US$4.09, and December fell 4 1/4 cents to US$3.97 1/2.

 

Corn couldn't rally from its bounce Thursday morning, and that encouraged technical selling, a commission house analyst said.

 

Fund selling helped push prices to session lows late with estimates of 5,000 contracts sold.

 

"As long as May trades below its 40-day and 50-day moving averages, the funds will continue to liquidate their positions," a floor analyst said.

 

Corn continues to see additional selling ahead of several private analyst acreage estimates and a weak technical posture, said Don Roose, president of US Commodities in West Des Moines, Iowa.

 

Weekly export sales were "soft" and that continues to go along with ideas that the cash market pipeline is full, he added.

 

The USDA reported weekly corn export sales were 788,000 metric tonnes including 38,000 for delivery in 2007-08. Analysts had expected sales of 800,000-1.1 million metric tonnes.

 

The market is bear spread, and it's hard to rally in those conditions, Roose said.

 

Price direction Friday depends on the private analyst acreage estimate and how the market reacts. Most people are expecting a large planted-acreage number, Roose added.

 

On daily technical charts, May settled below most major moving averages but above its 100-day and 200-day moving averages. The 14-day relative strength index for May is 36.19.

 

Buyers on Thursday included FC Stonnee, which bought 500 May; RJ O'Brien, which bought 600 May; and Rand, which bought 500 May.

 

JP Morgan sold 700 May and Tenco sold 300 July.

 

Oat futures settled higher, shrugging off the losses in corn and wheat as fund buying pushed prices higher, a floor trader said. The funds continue to be buyers but Thursday the commercials were not interested in selling, the trader added.

 

May oats settled 5 1/2 cents higher at US$2.70 per bushel and July also gained 5 1/2 cents to US$2.72 3/4.

 

Ethanol futures finished lower in light trade. The April contract ended 5 cents lower to US$2.32 per gallon. The May contract fell 7.5 cents to US$2.15 per gallon.

 

Friday, a private grain firm is expected to release its planted-acreage intentions sometime during the session.

 

Friday afternoon, the Commodity Futures Trading Commission is scheduled to release the commitment of traders report for the period ending March 13.