August 10, 2006

 

CBOT Corn Review on Wednesday: Up; position squaring, tech buying support

 

 

Chicago Board of Trade corn futures settled near session highs Wednesday as position squaring ahead of Friday's U.S. Department of Agriculture crop production and supply and demand reports supported futures, sources said.

 

September gained 4 cents to US$2.39 3/4 per bushel and December rose 3 3/4 cents to US$2.56 3/4. Day session e-CBOT volume in December was 19,904 contracts.

 

Activity was quiet for much of the session, with the market supported by traders evening up positions after recent price weakness, a floor source said.

 

Late in the session, the market drew some additional support when December moved above short-term technical resistance at US$2.55 1/2, a floor analyst said.

 

The key to Wednesday's trade was a lack of selling and a little bit of buying interest, he added.

 

It was the short covering before Thursday's short covering, a commission house analyst said. The market is waiting on Friday's U.S. Department of Agricultural reports for direction, he added.

 

In a Dow Jones Newswire survey of 22 analysts, the average 2006-07 corn production estimate was 10.795 billion bushels, slightly higher than the U.S. Department of Agriculture's 10.740 estimate.

 

The average yield estimate was pegged at 149.9 bushels per acre, slightly higher than the 149.0 bushels in July. The August report will be the first field survey taken of the crop.

 

In a Dow Jones Newswire survey of 15 analysts, the average of 2005-06 corn ending stocks estimate was 2.041 billion bushels, 21 million lower than the 2.062 estimated by the USDA in the July supply and demand report.

 

The average ending stocks estimate of the 2006-07 was 1.105 billion bushels, slightly above the 1.077 forecast by the USDA in July.

 

The USDA is scheduled to release its August crop production report on Friday at 7:30 a.m. CDT.

 

On day session open auction technical charts, December remained below its major moving averages despite the late rally.

 

Buyers on Wednesday included FC Stonnee, which bought 400 December. Rand Financial bought 400 December, and JP Morgan bought 300 March and 200 December.

 

Rand Financial sold 1,000 September, and JP Morgan sold 200 December.

 

Oat futures settled unchanged to fractionally higher in light trading with both fund buying and selling keeping prices near Tuesday's levels, a floor trader said. September oats ended up 1/2 cent at US$1.82 per bushel while December finished unchanged at US$1.88 1/2.

 

Ethanol futures finished mixed in quiet trading. August ethanol rose 1 cent to US$2.52 cents per gallon and September gained 4 1/2 cents to US$2.55.

 

Thursday, the USDA is scheduled to release the weekly export sales for the period ending Aug. 3. Analysts expect sales between 950,000-1.4 million metric tonnes compared to the 1,602.1 million tonnes sold in the week ended July 27.