March 24, 2007

 

CBOT Corn Review on Friday: Mixed; bear spreading weighs on nearbys

 

 

Chicago Board of Trade corn futures ended mixed Friday with the nearby months lower and the deferred contracts higher as bear market spreading pressured the old-crop contracts, a floor analyst said.

 

May corn settled 6 1/4 cents lower at US$4.03 1/4 per bushel, July ended down 5 3/4 cents to US$4.15 1/4 and December finished up 1/4 cent at US$4.09 3/4.

 

There are concerns that old-crop stocks will be bigger than expected and new-crop acreage estimates supportive in next week's U.S. Department of Agriculture reports, the analyst said.

 

"The focus is on Friday's USDA acreage and quarterly stocks report," said Shawn McCambridge, senior grain analyst at Prudential Financial.

 

Trading was modest, with some people on the sidelines waiting for fresh news.

 

"Why jump into the market now, with the reports due out next week," McCambridge said.

 

The market saw the liquidation of weak long as well as weak short positions, which contributed to the choppy activity, a floor trader said.

 

Corn should begin to see some position evening next week ahead of the reports, the floor trader added.

 

On daily technical charts, May traded an outside day, above the high and low established in Thursday's session, and settled below its 10-day moving average.

 

Buyers on Friday included FC Stonnee, which bought 1,000 May; Citigroup, which bought 1,100 July; and Tenco, which bought 1,000 December 2008. JP Morgan sold 900 December and 700 July and Tenco sold 500 December.

 

Commodity fund selling was estimated at 1,500 contracts.

 

In options trading, JP Morgan bought 2,000 July US$4.20 calls and sold 500 July US$3.80 calls.

 

Oat futures settled mixed after an early rally to new life-of-contract highs, reaching the highest price for oats in more than 10 years. Continued fund buying supported prices but profit-taking pressed the market after July was unable to extend its gains, a floor trader said.

 

The rally in oats is all about the money flows and not the fundamentals, an analyst said.

 

May oats fell 2 3/4 cents to US$2.91 per bushel and July settled 2 cents lower to US$2.93.

 

Ethanol futures were unchanged to higher in light trade. The April contract settled unchanged at US$2.300 per gallon. The May contract did not trade and settled 1 cent higher at US$2.19.

 

On Friday afternoon, the Commodity Futures Trading Commission is scheduled to release the weekly commitments of traders report for the period ended March 20.

 

On Monday, the USDA is scheduled to release the weekly export inspections at 11 a.m. EDT.