September 23, 2006

 

CBOT Corn Review on Friday: Lower; market consolidates before weekend

 

 

Chicago Board of Trade corn futures ended mostly lower Friday, unable to generate much momentum either way as the market consolidated after Thursday's strong gains, sources said.

 

December settled 2 cents lower to US$2.55 1/4 cents per bushel, and March slipped 1 1/2 cents to US$2.68 1/2. E-CBOT day-session volume in December was 51,827 contracts.

 

The funds were light buyers, but there was some profit taking ahead of the weekend and after Thursday's gains, which helped limit the upside, a floor trader said.

 

Losses in crude oil futures also acted as a drag on prices, a commission house analyst said. "Corn followed crude oil futures to some extent, and when crude oil weakened, corn weakened along with it," he said.

 

The market had little reaction to 2007 acreage estimates released before the opening from private analytical firm Informa Economics.

 

Trade sources said Informa predicted 2007 U.S. corn acreage at 83.1 million acres, above the 79.366 million acres reported by the U.S. Department of Agriculture in June for the 2006 U.S. corn crop.

 

Most people believe that corn acres will increase next year, so the numbers had little impact, a floor source said.

 

On open-auction technical charts, December couldn't get above its 200-day moving average, which encouraged some participants to take profits, a floor analyst said.

 

Some concerns over the potential for harvest delays over the weekend due to rain in the U.S. Midwest helped to limit the declines, he added.

 

Buyers Friday included Fimat, which bought 2,500 December; Goldenberg-Hehmeyer, which bought 1,500 December; Man Financial, which bought 800 December; and JP Morgan, which bought 600 December.

 

Citigroup sold 1,500 December, UBS sold 1,500 December, Man Financial sold 600 December, and Rand sold 500 December.

 

Overall commodity fund buying was estimated at 1,800 contracts.

 

Oat futures settled higher as light fund and commercial buying supported prices, a floor trader said. December oats rose 2 1/2 cents higher at US$2.02 3/4 per bushel and March gained 2 cents to US$2.08 3/4.

 

Ethanol futures finished lower. October ethanol did not trade and settled 3.5 cents lower at US$1.735 per gallon and November slipped 2.5 cents to US$1.71.

 

Friday afternoon, the Commodity Futures Trading Commission is scheduled to release the latest commitment of traders report.

 

On Monday, the U.S. Department of Agriculture is scheduled to release the export inspections weekly report at 10 a.m. CDT and the weekly crop progress report at 3 p.m. CDT (2000 GMT).