April 19, 2007

 

CBOT Corn Review on Wednesday: Higher on bear spread unwinding

 

 

Chicago Board of Trade corn futures settled higher Wednesday in most months with the nearby contracts stronger as participants bought the nearby months and sold the deferred contracts, trimming their bear market spread positions, analysts said.

 

May corn gained 10 1/4 cents to US$3.63 1/2 per bushel, July rose 10 cents to US$3.75 1/4 and December settled 2 cents higher to US$3.81 1/2.

 

The funds unwound some of their bear market spread positions Wednesday, said Don Roose, president of U.S. Commodities in West Des Moines, Iowa.

 

Additional support for the nearby months was generated by stronger cash basis levels as farmers have turned their attention toward planting their corn instead of selling it, Roose said.

 

December has been trading at a premium to the nearby contracts on concerns that producers wouldn't be able to plant corn in a timely fashion and it appears that the planting pace is picking up, trimming some of the concerns, a commercial-connected analyst said.

 

The July-December spread settled at 6 1/4 cents basis December, down 8 cents from Tuesday's close.

 

A generally dry weather pattern is expected to remain in place in the U.S. corn belt over the next several days allowing producers to begin fieldwork, DTN Meteorologix Weather said.

 

Nearby corn contracts could see additional strength versus the deferred months Thursday barring any change in the weather forecast, a commission house analyst said.

 

On technical charts, both May and July futures ended near their 10-day moving averages with December remaining below its 10-day and 100-day moving averages.

 

Buyers Wednesday included Citigroup, which bought 400 December while Fimat sold 600 July.

 

Commodity fund buying was estimated at 3,000 contracts.

 

In options trading, FC Stonnee sold 2,000 July US$3.70 calls, and Prudential bought 600 December US$4.10 calls and sold 350 December US$3.50 puts.

 

Oat futures ended slightly higher in thin trade as the rolling out of May and into July was the feature with flat price trading thin, a floor analyst said.

 

May oats settled 1 1/4 cents higher at US$2.68 1/4 cents per bushel and July gained 2 cents to US$2.74 3/4.

 

Ethanol futures ended mixed with the nearby months slightly higher. The May contract settled 1.6 cents higher at US$2.191 cents per gallon. June ethanol gained .004 cent to US$2.11.

 

On Thursday, the U.S. Department of Agriculture is scheduled to release the weekly export sales report for the period ended April 12. Analysts expect sales between 600,000-800,000 metric tonnes, lower than the 1.5 million sold the previous week.