March 20, 2007

 

CBOT Corn Review on Monday: Mostly higher; nearby months weak

 

 

Chicago Board of Trade corn futures ended mostly higher Monday in choppy trade, with the deferred months gaining on the nearby contracts, analysts said.

 

May corn fell 1 1/2 cents to US$3.98 per bushel, July declined 3/4 cent to US$4.10, and December gained 3 cents to US$4.06.

 

"It was a classic bear-spread scenario," said Brian Hoops, president of Midwest Market Solutions in Yanktonne, S.D. Traders are mostly long the front months and liquidated some of those positions due to losses incurred on recent price weakness, Hoops said.

 

The July-December corn spread, which was 20-to-30 cents a month ago basis July, is now in danger of being even money, which should be a good level of support, he added.

 

The general factors that impacted prices to the downside haven't changed since last week, and the technical picture remains poor, a floor analyst said.

 

In addition, the cash corn market was weak, putting pressure on the nearby contracts, he noted.

 

Export inspections were within analyst expectations and had little impact, a local trader said.

 

The U.S. Department of Agriculture reported corn inspected for export totaled 40.8 million bushels for the week ended March 15, within the 36-44 million bushels anticipated by analysts.

 

The corn market seemed to have no energy for much of the session and needs a catalyst of some type to trade higher Tuesday, a floor trader said.

 

On daily technical charts, May traded below its 100-day moving average for the second session in a row but settled above it.

 

Buyers on Monday included ADM, which bought 200 May and 300 July; Fimat, which bought 200 May and 500 July; and Citigroup, which bought 400 December 2008.

 

Sellers included JP Morgan, which sold 400 May.

 

Commodity fund selling was estimated at 1,500 contracts.

 

In options trading, FC Stonnee bought 2,000 May US$3.80 puts and sold 2,000 May US$4.20 calls.

 

Oat futures settled higher, benefiting from continued light fund buying in the nearby months though commercial selling was noted, a commission house analyst said.

 

May oats settled 2 1/2 cents higher to US$2.77 per bushel and July ended up 1 3/4 cents at US$2.79 1/4.

 

Ethanol futures settled slightly higher in thin trade. The April contract ended up 1 cent at US$2.33 per gallon. The May contract also gained 1 cent to US$2.185 per gallon.