September 19, 2007

 

CBOT Corn Review on Tuesday: Settles unchanged in choppy trade

 

 

Chicago Board of Trade corn futures ended at unchanged levels Tuesday in thin, choppy trade, analysts said.

 

December corn settled unchanged at US$3.52 1/4 cents per bushel and March also ended flat at US$3.69.

 

An active harvest pace and better-than-expected yields limited buying interest in corn and led to light selling early in the session, said Mike Zuzolo, chief analyst at Risk Management Commodities. Technical selling also pressed the market lower with electronically traded December falling below several major moving averages, Zuzolo said.

 

Losses were trimmed after midsession as commercial buying emerged at the lows of the day which set off position squaring with corn retracing its losses, an e-CBOT trader said.

 

The grain markets just bided their time Tuesday waiting for the Federal Reserve's decision on interest rates, said Zuzolo.

 

Light wheat-corn spread unwinding also provided thin support for corn with wheat futures unable to move higher despite a bullish Australian wheat production estimate, a trader said. Australia estimated its 2007-08 wheat production at 15.5 million metric tonnes, down from its June estimate of 22.5 million and the U.S. Department of Agriculture's estimate of 21 million tonnes last week.

 

Price direction on Wednesday depends on the influence of outside markets after the Fed's decision to cut interest rates Tuesday as well as continued harvest and yield reports, a trader said.

 

On daily technical charts, electronically traded December corn ended above most of its major moving averages after falling below them earlier in the session but remained within its recent trading range.

 

In open auction trading, MF Global sold 400 December.

 

Open auction commodity fund selling was estimated at 1,000 contracts.

 

In options trading, JP Morgan bought 2,000 December US$5.00 calls and RJ O'Brien bought 2,500 December US$4.00 calls.

 

Oat futures settled lower but well off of lows set earlier in the session, a trader said. Screen based selling pushed prices sharply lower in electronic trading in thin activity with December touching limit down briefly, before rebounding on short covering, the trader said.

 

December oats settled 5 cents lower at US$2.77 1/2 per bushel.

 

Ethanol futures ended mixed in thin trade. October ethanol settled .005 cent lower at US$1.610 per gallon and November gained 1.5 cents to US$1.615.