August 11, 2007

 

CBOT Corn Review on Friday: Slightly higher after USDA reports

 

 

Chicago Board of Trade corn futures ended higher Friday despite a better-than-expected crop production estimate from the U.S. Department of Agriculture, analysts said.

 

September corn gained 3/4 cent to US$3.33 per bushel, December rose 1 3/4 cents to US$3.50 1/2 and March ended up 1 1/4 cents at US$3.65 3/4.

 

The production number was a little bit bigger but not really a surprise, said John Kleist at Kleist Ag Consulting.

 

The USDA estimated 2007-08 corn production at 13.054 billion bushels, above the 12.909 billion bushel average analyst estimate as well as the 12.840 billion bushels estimated by the government in July.

 

The USDA raised 2007-08 corn ending stocks to 1.516 billion bushels, up only 14 million bushels, and trimmed world corn ending stocks to 102.2 million metric tonnes from the 108.4 million estimated in July.

 

Corn ending stocks were raised slightly from last month, while world ending stocks were revised downward, so there was a bit of uncertainty in the market that kept it grounded, Kleist said.

 

Trading was extremely choppy as the numbers in the report were mixed, an E-CBOT trader said. The market sold off on the production number and worries about outside markets, but at the lows of the day, selling interest dried up and prices recovered on speculative buying, the trader said.

 

In addition, some participants noted that the USDA counted plant population in this report and some participants are concerned that the crop will get smaller as the year continues, like it did last year, the E-CBOT trader said.

 

On daily technical charts, electronically traded December settled under its 40-day moving average, remaining within the range established earlier in the week. In open auction trading, Tenco bought 1,000 September., and Penson GHCO bought 2,000 December, while Man Financial sold 500 December.

 

Commodity fund buying was estimated at 2,500 contracts.

 

In options trading, RJ O'Brien sold 2,000 December US$3.50 calls, and Iowa Grain bought 2,500 May US$4.00 calls and sold 2,500 May US$5.00 calls and 2,500 May US$3.20 puts.

 

Oat futures finished lower as light speculative selling weighed on prices with Friday's USDA oat production estimate ignored by the market, an analyst said.

 

The USDA estimated U.S. oat production at 98 million bushels, slightly lower than the 101 million bushels estimated in July.

 

September oats declined 2 3/4 cents to US$2.49 3/4 per bushel, December fell 3/4 cent to US$2.60 1/2, and March ended down 2 3/4 cents at US$2.69 1/2.

 

Ethanol futures settled with thin losses. September ethanol slipped .002 cent to US$1.834 per gallon and October settled 3.1 cents lower at US$1.751.

 

Friday afternoon, the Commodity Futures Trading Commission is scheduled to release the commitment of traders report for the period ending Aug. 7.