March 28, 2007

 

CBOT Corn Review on Tuesday: Finishes slightly higher in choppy trade

 

 

Chicago Board of Trade corn futures settled higher in thin, choppy trading Tuesday with the lack of fresh inputs ahead of Friday's U.S. Department of Agriculture's acreage and stocks reports limiting activity, a floor analyst said.

 

May corn settled 1 1/2 cents higher at US$3.92 1/2 per bushel, July rose 1/4 cent to US$4.03 3/4, and December also gained 1/4 cent to US$4.01 1/2.

 

The corn market is "a vast waiting room and the doctor (the USDA) won't be in until Friday at 8:30 a.m. EDT," said Vic Lespinasse of AG Edwards & Sons.

 

U.S. corn planted acreage for the 2007-08 marketing year is estimated at 88.061 million acres, according to a survey of 22 analysts conducted by Dow Jones Newswires. This is 9.7 million acres higher than the 78.3 million planted last year and above the 87.0 million acres estimated by the USDA at its Outlook Forum earlier in March.

 

U.S. quarterly corn stocks were estimated at 6.023 billion bushels as of March 1, 2007, according to a survey of 15 analysts conducted by Dow Jones. Stocks as of March 1 2006, were estimated at 6.987 billion bushels by the USDA.

 

Corn drifted on either side of unchanged for most of the session, unable to gain any momentum in either direction ahead of the reports, Lespinasse said. In addition, speculative funds were pretty much on the sidelines compared to Monday's activity, he said.

 

Commodity fund selling was estimated at 1,000 contracts.

 

The market couldn't make new lows and ran out of selling interest which brought in thin position squaring, a floor analyst said. The lack of any buying or selling conviction kept corn trading near Monday's settlement prices, he added.

 

Corn could see some position squaring ahead of the report on Wednesday, the analyst said. On a risk-reward ratio, given the current price levels "you don't want to be short heading into the USDA report," the analyst said.

 

On daily technical charts, May remained below its 100-day moving average and traded an inside day, within the range established in Monday's session.

 

Buyers on Monday included Rand, which bought 600 May and Fimat, which bought 400 July.

 

JP Morgan sold 500 July and 400 May and Man Financial sold 500 May.

 

In options trading, JP Morgan sold 1,000 May US$3.70 calls and 1,000 July US$3.80 calls, and Fimat bought 2,000 May US$4.20 calls.

 

Oat futures settled mixed in quiet trading as the lack of fresh news kept prices within narrow ranges compared to recent sessions, a floor trader said. Trading was choppy and two-sided for much of the day, he added.

 

May oats ended unchanged at US$2.89 1/2 a bushel, and July settled 2 cents lower at US$2.92 1/2.

 

Ethanol futures ended lower in quiet activity. The April contract settled 3 cents lower at US$2.30 a gallon. The May contract slipped .015 cents to US$2.19.