August 9, 2007

 

CBOT Corn Review on Wednesday: Higher on pre-report positioning, technical buys

 

 

Chicago Board of Trade corn futures settled higher Wednesday and at levels not seen since mid-July as pre-report position squaring before the USDA's crop production and supply/demand reports boosted prices, analysts said.

 

Sept corn settled 5 3/4 cents higher to US$3.41 per bushel, Dec rose 6 cents to US$3.58 and Mar also ended up 6 cents to US$3.73 1/2.

 

Corn benefited from positioning ahead of the report as well as technical buying after December moved above US$3.50 and US$3.52 on daily technical charts, said Jack Scoville, a vice president at Price Futures Group.

 

Friday, the U.S. Department of Agriculture is scheduled to release the first field production survey of the 2007-08 corn crop.

 

The average production estimate for the 2007-08 crop year was 12.909 billion bushels, according to an average of 23 analysts, 69 million bushels above the 12.840 billion estimated by the USDA in July.

 

The average yield estimate for the 2007-08 crop year was 151.2 bushels per acre, according to a survey of 23 analysts, compared the 150.3 bushels estimated in July by the USDA.

 

Speculative buying added to the gains as "people are running to cover their positions ahead of Friday's reports," Scoville said.

 

Spillover strength from the other grains added to gains in corn, a commission house analyst said. Nov. soybeans jumped 15 1/4 cents to US$8.78 per bushel and Dec. wheat rallied 18 1/2 cents to 7.01, the first time wheat has traded above US$7.00 in over a decade, a commercial wheat trader said.

 

Hot and dry weather conditions in the southern U.S. Midwest had little impact as the technical buying and position squaring took precedent with good rains across the northern half of the region also offsetting southern Midwest weather concerns, a floor trader said.

 

Price direction on Thursday will rely on the amount of pre-report positioning that people do, a commission house analyst said.

 

On daily technical charts, electronically traded December settled above its 40-day moving average.

 

In open auction trading, JP Morgan bought 300 December and 500 March and Man Financial bought 800 December and sold 800 December.

 

Commodity fund buying was estimated at 8,000 contracts.

 

In options trading, Tenco bought 5,000 December US$3.00 puts, JP Morgan bought 2,000 December US$3.60 calls and RJ O'Brien sold 2,000 December US$3.20 calls.

 

Oat futures ended mostly lower as early fund selling in the deferred contracts and light harvest related pressure weighed on prices, an analyst said.

 

Sept settled 3 cents lower at US$2.59 per bushel, Dec declined 1 3/4 cents to US$2.70 1/2, and Mar settled up 1/2 cent to US$2.80 1/4.

 

Ethanol futures ended mixed in thin trade. Sept ethanol rose 0.006 cent to US$1.845 per gallon and October settled 0.005 cent lower at higher at US$1.805.

 

Thursday the USDA is scheduled to release the weekly export sales report for the week ended Aug. 1 at 8:30 a.m. EDT (1230 GMT).