March 27, 2007

 

CBOT Corn Review on Monday: Moderately lower but above session lows

 

 

Chicago Board of Trade corn futures settled moderately lower Monday but off lows set during the session as technically inspired fund selling pushed prices sharply lower only to recover somewhat near the close, a floor trader said.

 

May corn settled 12 1/4 cents lower at US$3.91 per bushel, July fell 11 3/4 cents to US$4.03 1/2, and December declined 8 1/2 cents to US$4.01 1/4.

 

Technical based fund selling pressured the nearby contracts, and once May fell beneath its 100-day moving average, the technical selling accelerated, a commission house trader said.

 

Fund selling was estimated at 15,000 contracts.

 

It was technical selling ahead of a fundamental report, said Don Roose, president of US Commodities in West Des Moines, Iowa. Right now the technicals are nervous but later in the week the fundamentals will be nervous, he added.

 

The 6-to-10-day weather forecast called for drier weather in the U.S. Midwest and that helped kick off the technical weakness Monday morning, a floor trader said.

 

"Who wants to end up short on this kind of a break ahead of the U.S. Department of Agriculture acreage report," said Roose.

 

May corn settled over 21 cents lower than the high reached in Friday's session.

 

It's possible that the corn market might have seen the low for the week on Monday ahead of Friday's report, Roose added.

 

Fundamental news was light with the USDA releasing the export inspections report during the session.

 

Corn inspected for export totaled 39.1 million bushels for the week ended March 22, within the 36-45 million bushels expected. The report was within the estimates and had no impact, a floor analyst said.

 

On daily technical charts, May settled below its 100-day moving average for the first time since late September and settled at its lowest level since Jan. 11.

 

Buyers on Monday included FC Stonnee, which bought 1,000 July and 900 December; JP Morgan, which bought 2,500 December and 500 May; and Fimat, which bought 1,000 September.

 

Sellers included Tenco, which sold 1,000 December and 600 May.

 

In options trading, Man Financial bought 2,500 May US$4.40 calls.

 

Oat futures finished on either side of unchanged in light, two-sided trade as the market was unable to gain any momentum in either direction after a rally to new life-of-contract highs in electronic trading, a floor trader said.

 

May oats fell 1 1/2 cents to US$2.89 1/2 per bushel and July settled 1 1/2 cents higher to US$2.94 1/2.

 

Ethanol futures settled slightly higher in thin trade. The April contract settled 3 cents higher at US$2.33 per gallon. The May contract gained 1.5 cents to US$2.20 1/2.