August 19, 2006

 

CBOT Corn Review on Friday: Fractional gains on position squaring

 

 

Chicago Board of Trade corn futures ended mostly higher Friday, with the nearby contracts scoring fractional gains, recovering from early losses in late trade, sources said.

 

September rose 3/4 cent to US$2.19 3/4 cents per bushel and December settled 1/4 cent higher to US$2.35 3/4. E-CBOT day session volume in December was 17,243 contracts.

 

Activity was quiet throughout the session as the market continues to lack a feature after last Friday's USDA crop production report and favorable late- season weather.

 

Corn opened to the downside with September and December making new life-of-contract lows in open-auction trade.

 

Futures remained lower for much of the session as the market struggled to find a bottom after recent price weakness, a floor analyst said.

 

Moderate commodity fund selling also kept prices on the defensive, as did weaker wheat and soybean prices, he added.

 

As the session drew to a close, position squaring ahead of the weekend and a recovery in wheat futures helped give corn a lift, a commission house analyst said.

 

There was nothing to trade off Friday, but the market is oversold and it looks like corn is trying to find a bottom here, he added.

 

The 14-day relative strength index in December corn stands at 30.33. A reading below 30 is considered oversold and a reading above 70 is considered overbought.

 

Although the near-term looks negative, strong demand from the ethanol industry and export demand should help the market longer term, a floor trader said.

 

Buyers Friday included Fimat, which bought 700 December; UBS, which bought 500 December; ABN Amro, which bought 400 December; and Goldenberg-Hehmeyer, which bought 400 December 2007.

 

UBS sold 2,000 December, JP Morgan sold 800 December and 200 September, FC Stonnee sold 600 December and O'Connor sold 600 December and 500 December 2007.

 

Overall commodity fund selling was estimated at 5,100 contracts.

 

In spread trading, Tenco bought 2,500 Sep-Dec and Fimat bought 2,000 Dec-Sep.

 

Oat futures ended mostly lower as light technical selling in December weighed on the market, a commission house analyst said. September oats fell 1 1/2 cents to US$1.75 1/4 per bushel and December finished unchanged at US$1.85. Ethanol futures ended unchanged in quiet trading.

 

September ethanol settled unchanged at 2.408 cents per gallon and October also finished unchanged at 2.408.

 

Friday afternoon, the Commodity Futures Trading Commission is scheduled to release the commitment of traders for the period ending Aug. 15.

 

On Monday, the USDA is schedule to release the weekly export inspections report at 10 a.m. CDT, and the weekly crop progress report at 3 p.m. CDT.