September 1, 2007

 

CBOT Corn Review on Friday: Settles higher as market consolidates

 

 

Chicago Board of Trade corn futures finished higher Friday, unable to maintain early gains based on the rally in wheat to another all-time high. But corn did finish with modest gains as the market consolidated at month's end, analysts said.

 

September corn settled 1 1/4 cents higher at US$3.24 per bushel, December gained 1/4 cent to US$3.40 and March finished unchanged at US$3.56.

 

December wheat traded 20 1/2 cents higher to US$8.05 per bushel at the opening, the highest price ever established for a wheat futures contract. The corn market was higher initially on the rally in wheat futures but when wheat couldn't maintain those gains, corn prices retreated, said Bill Nelson, associate vice president at AG Edwards & Sons in St. Louis. However, end-of-month position squaring provided support for corn, Nelson said.

 

December wheat ended 9 cents lower at US$7.75 1/2 per bushel.

 

There wasn't much news for corn to trade higher on, but once wheat turned lower some market participants exited their long wheat-short corn trades, which provided additional support to corn, an E-CBOT trader said.

 

The lack of fresh bullish news limited the upside with scattered talk of better-than-expected yields in southern corn-producing areas of the U.S., a floor trader said.

 

Ideas that the U.S. Department of Agriculture could increase its production estimate in September also kept prices within relatively narrow ranges, the trader said.

 

Trading activity was modest with some participants absent ahead of the long holiday weekend. The CBOT is closed Monday in observance of Labor Day.

 

Price direction on Tuesday will depend upon the overnight weather forecasts, an analyst said. If the weather remains favorable for harvest activities corn will struggle, but a lot depends on what wheat does, the analyst said.

 

On daily technical charts, electronically traded December settled below its major moving averages and traded an "inside day," between the high and low established Thursday.

 

In open auction trading, commodity fund buying was estimated at 3,000 contracts and Penson GHCO sold 500 December.

 

In options trading, JP Morgan bought 2,000 December US$4.60 calls and Penson GHCO bought 1,000 December US$4.60 calls and sold 1,000 December US$3.60 calls.

 

Oat futures ended higher in light trade as modest fund buying supported prices despite deliveries against the September contract, a trader said. The deliveries indicate that oats are available, the trader said.

 

Sep oats rose 3 3/4 cents to US$2.42 per bushel, Dec settled up 2 cents to US$2.54 3/4, and Mar also gained 2 cents to US$2.65 3/4.

 

Ethanol futures ended mostly higher in thin trade. Sep ethanol slipped 2 cents to US$1.67 per gallon while Oct gained 4.6 cents to US$1.626.

 

On Friday afternoon, the Commodity Futures Trading Commission is scheduled to release the weekly commitments of traders report for the period ended Aug. 28. The USDA is scheduled to release the export inspections report on Tuesday at 11 a.m. EDT and the weekly crop progress report at 4 p.m. EDT.