April 20, 2007

 

CBOT Corn Review on Thursday: Ends mixed; spreads support nearby

 

 

Chicago Board of Trade corn futures ended mixed Thursday as the continued unwinding of bear market spreads underpinned the nearby months and weighed on the deferred contracts, floor traders said.

 

May corn settled 7 3/4 cents higher at US$3.71 1/4, July gained 7 cents to US$3.82 1/4, while December declined 1 1/2 cents to US$3.80.

 

Spread unwinding remained the feature for the second day in a row, a commercial-connected analyst said. The July/Dec spread, which settled at 14 1/4 cents premium December Tuesday, settled at 2 1/4 cents premium July on Thursday.

 

Participants are exiting the spread as it appears that there won't be a problem planting this year's corn crop, the commercial analyst said.

 

The spreading was the main event but there was also some speculative buying in the July which was technically based, a floor analyst said.

 

In addition, the midday weather forecasts were mixed and corn also drew support from stronger wheat prices, the trader added.

 

The market had little reaction to the weekly export sales report released before day session trading started. The U.S. Department of Agriculture reported weekly corn export sales were 865,800 metric tonnes for the period ended April 12, slightly above the 600,000-800,000 tonnes expected by analysts.

 

Market direction Friday will depend on the updated weather forecasts and whether the recent spread activity continues, the trader said.

 

On daily technical charts, both May and July futures finished above their 10-day moving averages with December beneath its 10-day and 100-day moving averages.

 

JP Morgan bought 400 December while Penson GHCO sold 1,000 December and ADM sold 900 May.

 

Commodity fund buying was estimated at 2,000 contracts.

 

In options trading, Man Financial sold 1,000 December US$4.00 calls and FC Stonnee bought 800 July US$3.50 puts and sold 800 July US$4.20 calls.

 

Oat futures settled little changed as light rolling out of May and into July was the dominant factor in trading, an analyst said. If the funds don't support their positions it is hard for oats to rally, the analyst added.

 

May oats slipped 1/4 cent to US$2.68 cents per bushel and July settled 1/4 cent higher to US$2.75.

 

Ethanol futures ended mostly lower in modest trade with the May contract 3.5 cents lower to US$2.156 cents per gallon. June ethanol slipped 1 cent to US$2.10.

 

Friday afternoon, the Commodity Futures Trading Commission will release the weekly commitment of traders report for the period ending April 17.