August 10, 2007

 

CBOT Corn Review on Thursday: Settles lower on pre-report profit taking

 

 

Chicago Board of Trade corn futures finished lower in choppy trade, making new lows on the close as profit-taking ahead of Friday's USDA production and supply/demand reports kept prices on the defensive, analysts said.

 

Sept corn declined 8 3/4 cents to US$3.32 1/4 per bushel, Dec settled 9 1/4 cents lower at US$3.48 3/4 and Mar ended down 9 cents at US$3.64 1/2.

 

The market has had a good run-up in prices, up almost 30 cents in the last several trading sessions in front of the first crop production report of the year so traders took some profits, said Dale Durchholz, an analyst with Agrivisor, in Bloomingtonne, Ill.

 

Friday the U.S. Department of Agriculture is scheduled to release the first field 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 U.S. Department of Agriculture 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.

 

Technical selling also added to the poor tonnee, a commission house analyst said. Technical oriented traders sold corn, retracing some of the gains put in ahead of the report, the analyst said.

 

Export sales were within analyst expectations and had little impact. The USDA reported weekly corn export sales were 1.336 million metric tonnes, within the range of analyst expectations.

 

Market direction on Friday and for the near-term will depend on the numbers in the USDA report, an analyst said.

 

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

 

In open auction trading, Tenco bought 500 Dec, Bunge bought 400 Dec and Man Financial bought 500 Dec and 500 Sept.

 

Commodity fund selling was estimated at 4,000 contracts.

 

In options trading, Man Financial sold 700 Dec US$3.40 calls, and 1,000 Dec US$3.50 puts while buying 1,500 Sept US$3.70 calls. Prudential bought 1,500 Dec US$3.60 calls and sold 1,500 Dec US$4.00 calls.

 

Oat futures settled lower as fund and technical selling kept prices on the defensive all day, a trader said.

 

Sept fell 7 cents lower to US$2.52 per bushel, Dec settled down 9 1/4 cents to US$2.61 1/4, and March declined 8 cents to US$2.72 1/4.

 

Ethanol futures ended lower in modest activity. Sept ethanol fell 0.009 cent to US$1.836 per gallon and October settled 2.3 cents lower at US$1.782.