September 20, 2007

 

CBOT Corn Review on Wednesday: Settles higher on spreads, technical buying

 

 

Chicago Board of Trade corn futures settled higher and near session highs Wednesday, boosted by wheat-corn spread unwinding and technical buying near the close, analysts said.

 

December settled 6 1/4 cents higher at US$3.58 1/4, its highest settlement price since late August, and March rose 5 3/4 cents to US$3.74 3/4.

 

"Corn was supported by the break in the wheat market," said Don Roose, president of US Commodities in West Des Moines, Iowa. When wheat traded lower, that led to the unwinding of wheat-corn spreads which helped to support to corn prices, Roose said. December wheat fell 24 cents to US$8.45 per bushel.

 

Technically, the market was strong all day with additional support coming from end-user buying when December corn traded below US$3.50, Roose said.

 

Support also came from a rebound in soybean futures from moderately lower levels, an analyst said. Corn and soybeans fed off of each other, the analyst added. November soybeans settled 1 1/2 cents higher at US$9.71 after trading as low as US$9.53.

 

Price direction Thursday depends on weekend harvest weather forecasts as well as the level of weekly export sales, an E-CBOT trader said.

 

The U.S. Department of Agriculture is scheduled to release the weekly export sales report for the week ended Sept. 13 at 8:30 a.m. EDT (1230 GMT). Analysts expect sales between 850,000 and 1.350 million metric tonnes.

 

On daily technical charts, electronically traded December corn remained within the range established in August, but settled at its highest level since Aug. 24.

 

In open auction trading, Tenco bought 500 December, JP Morgan sold 600 December and Fimat sold 800 December.

 

Open auction commodity fund buying was estimated at 2,000 contracts.

 

In options trading, JP Morgan sold 1,500 December US$3.50 puts, MF Global bought 2,000 March US$4.60 calls and Rand bought 1,000 March US$3.80 calls.

 

Oat futures settled little changed, with the market rebounding from early speculative liquidation as thin buying interest near the close helped prices recover, a commission house analyst said.

 

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

 

Ethanol futures ended unchanged to lower in modest activity. October ethanol settled 2 cents lower at US$1.59 per gallon and November finished unchanged at US$1.615.