June 21, 2007

 

CBOT Corn Review on Wednesday: Settles mostly higher in two-sided trade

 

 

Chicago Board of Trade corn futures ended mostly higher Wednesday but well off highs set earlier in the session as mixed midday weather forecasts limited upside momentum, analysts said.

 

July corn ended 1 3/4 cents lower at US$3.94 1/4 per bushel, September gained 1/4 cent to US$4.04 1/4, and Dec rose 2 3/4 cents to US$4.06 1/4.

 

Midday weather forecasts were not in agreement and that capped the market's ability to rally, said Mike Zuzolo, chief analyst at Risk Management Commodities in Lafayette, Ind.

 

Corn was higher for much of the morning on speculative buying as surging wheat values and sharply higher soybeans helped support prices after the limit-down losses set in several contracts Tuesday, a floor analyst said.

 

December wheat jumped 22 cents to US$6.23 1/2 per bushel and November soybeans gained 10 1/2 cents to US$8.74 1/2.

 

Technical buying added to the early gains but the inability of December to remain above its 10-day moving average led to light speculative liquidation, Zuzolo said.

 

Corn market price direction is all weather-related, the floor analyst said.

 

Bull market spread unwinding was also a bearish component of the market, a commission house analyst said. "If there really is a problem with corn, July would be sharply higher and its price action is telling the market there is not a problem, the commission house analyst said.

 

Thursday's price activity will continue to be set by overnight weather forecasts, a trader said. The weather sets the agenda, he added.

 

In open auction trading, JP Morgan bought and sold 1,000 December, Fimat bought 1,000 December and UBS bought 1,200 December.

 

In options trading, Tenco bought 2,000 September US$4.00 calls and sold 2,000 September US$4.40 calls. FC Stone bought 1,600 July US$3.95 calls.

 

Commodity fund buying was estimated at 8,000 contracts.

 

On daily technical charts, December settled below its 10-day moving average and at its lowest level in a week.

 

Oat futures ended higher as commission house buying offset commodity funds selling July and buying December, a floor trader said. Commercial firms were noted taking the other side of the spreads, the trader said. Activity was light.

 

July oats gained 2 3/4 cents to US$2.75 per bushel while December rose 5 1/4 cents to US$2.83.

 

Ethanol futures settled mixed in light trading. July ethanol settled .002 cent lower to US$1.952 per gallon and August also gained .002 to US$1.94.

 

On Thursday, the U.S. Department of Agriculture is scheduled to release its weekly export sales report for the week ended June 14 at 8:30 a.m. EDT (1230 GMT). Analysts expect corn sales between 500,000-850,000 metric tonnes.