September 12, 2007

 

CBOT Corn Review on Tuesday: Settles lower ahead of USDA report

 

 

Chicago Board of Trade corn futures finished lower Tuesday as long liquidation ahead of Wednesday's U.S. Department of Agriculture crop production and supply/demand reports pressured prices, analysts said.

 

September corn fell 5 1/4 cents to US$3.24 1/2 per bushel, December declined 4 3/4 cents to US$3.41 1/4 and March settled 5 1/4 cents lower to US$3.57 3/4.

 

"Early yield reports continue to be uniformly large and bigger than expected and that caused prices to decline," said Don Roose, president of US Commodities in West Des Moines, Iowa. "The feeling is that the production number due out Wednesday has a better chance of being larger than people think and that negatively impacted the market."

 

The average production estimate for the 2007-08 crop year was 13.128 billion bushels, according to a survey of 20 analysts, 74 million bushels above the 13.054 billion estimated by the USDA in August.

 

The average yield estimate for the 2007-08 crop year was 153.7 bushels per acre, according to a 20 analysts surveyed, compared the 152.8 bushels estimated in August by the USDA.

 

The USDA is scheduled to release updated estimates at 8:30 a.m. EDT Wednesday.

 

End-user buying provided some support, but concerns about the potentially larger crop size was bigger than the end-user buying, an e-CBOT trader said.

 

Despite the losses, technically the market remains within the recent trading range, the e-CBOT trader said.

 

Surging wheat futures prices near the close did help trim the losses, an analyst said. December wheat futures rallied 29 1/2 cents higher to US$8.90 1/2 per bushel, after trading to US$8.91, a new all-time high.

 

On daily technical charts, electronically traded December corn settled below its major moving averages.

 

In open auction trading, commodity fund selling was estimated at 3,000 contracts.

 

In options trading, FC Stonnee bought 4,000 December US$4.50 calls, and JP Morgan sold 1,500 December US$3.70 calls.

 

Oat futures settled mostly higher, underpinned by light fund buying and the late rally in wheat futures to new all-time highs, an analyst said.

 

September oats ended unchanged at US$2.56 per bushel and December rose 2 1/2 cents to US$2.70 1/4.

 

Ethanol futures ended mostly higher in quiet trade. October ethanol settled 3.5 cents higher to US$1.593 per gallon and November rose 2.1 cents to US$1.584.