March 23, 2007

 

CBOT Corn Review on Thursday: Flat in consolidation trade

 

 

Chicago Board of Trade corn futures settled fractionally mixed Thursday as the market consolidated after recent price strength in two-sided activity, a floor trader said.

 

May corn settled 1/4 cent lower at US$4.09 1/2 per bushel, July also ended down 1/4 cent to US$4.21, and December finished unchanged at US$4.09 1/2.

 

It was a low volume day with the market consolidating on technical charts, a commission house analyst added.

 

Corn was choppy all day with little news to move the market higher or lower, said Jason Britt, an analyst with Central States Commodities in Kansas City. The downside in prices was limited by the continued outlook for wet weather forecasts with some people concerned about the potential for planting delays, he added.

 

The gains in outside markets, particularly crude oil and metals, were ignored by corn as the market remained range bound, the floor trader said. In addition, weekly corn export sales were lower than expected and not able to provide any support.

 

The U.S. Department of Agriculture reported weekly corn export sales were 678,900 metric tonnes for the week ended March 15, below the 700,000 to 1.0 million tonnes forecast. The total included sales of 37,900 metric tonnes for delivery in the 2007-08 marketing year.

 

Corn could begin to see some position squaring on Friday ahead of next week's planting intentions report, a commission house trader said.

 

On daily technical charts, May traded an inside day, between the high and low established in Wednesday's session but remained above its 10-day moving average.

 

Buyers on Thursday included ADM, which bought 700 December and Rand, which bought 400 July. Penson GHCO sold 500 May and 500 July, and JP Morgan sold 700 July.

 

Commodity fund selling was estimated at 2,500 contracts.

 

In options trading, JP Morgan bought 4,000 Dec US$4.70 calls and sold 2,000 Dec US$3.70 puts, 2,000 Dec US$5.60 calls and 2,000 Dec US$5.80 calls.

 

Oat futures finished sharply higher as buying on e-cbot, thought to be fund buying, pushed prices in the nearby May and July to new life-of-contract highs.

 

"It's incredible that oats are trading near US$3.00 per bushel," a floor trader said. Light hedge selling was noted in the new-crop months.

 

May oats gained 10 cents to US$2.93 3/4 per bushel and July settled 8 1/2 cents higher to US$2.95.

 

Ethanol futures settled mixed in thin activity. The April contract settled unchanged at US$2.300 per gallon. The May contract gained .005 of a cent to US$2.18.