September 26, 2006

 

CBOT Corn Review on Monday: Mixed; outside markets supply support

 

 

Chicago Board of Trade corn futures finished mixed Monday, recovering from early losses as a sharp reversal in crude oil futures prices helped support corn, floor sources said.

 

December settled 1/2 cent lower at US$2.54 3/4 cents per bushel, and March ended 1/4 cent lower at US$2.68 1/4. e-CBOT day session volume in December was 52,379 contracts.

 

OPEC President Edmund Daukoru said Monday that he and other oil ministers were mulling the implications of the 20% plunge in oil prices over the last six weeks. The talk was that if crude fell below US$60 per barrel, OPEC would cut production, sparking the rally in energy and spilling over into corn, a commission house analyst said.

 

Strength in the deferred contracts also provided support, a commercial analyst said. The deferred months were strong all day and have been for the past several days, he said. Commission house buying in the deferred months was noted most of the session, he added.

 

December 2007 corn settled 2 cents higher at US$2.97 1/2.

 

Light commodity fund buying also provided some support after the funds were sellers earlier in the day, a floor trader said. Sources put commodity fund buying at 2,000 to 3,000 contracts.

 

This morning's slightly weaker-than-expected export inspections report had little market impact, a floor trader said. The U.S. Department of Agriculture reported 42.389 million bushels were inspected for export, below the 45 million to 50 million expected by analysts.

 

On open auction technical charts, December remained within the trading range established Thursday, bounded by the 200-day moving average on the upside and the 50-day moving average on the downside.

 

Buyers Monday included JP Morgan, which bought 600 December, Goldenberg-Hehmeyer, which bought 600 December, Man Financial, which bought 500 December, and Fimat, which bought 400 December.

 

Fortis sold 1,600 December, Fimat sold 800 December and Bunge sold 400 December.

 

In options trading, Tenco bought 3,000 March 2007 US$2.60 puts, and sold 3,000 March US$2.90 calls and 3,000 March US$3.00 calls.

 

Oat futures ended at lower levels as light commercial selling weighed on prices despite thin fund buying, a floor trader said.

 

December oats declined 1 3/4 cents to US$2.01 per bushel and March also settled 1 3/4 cents lower, at US$2.07.

 

Ethanol futures settled lower in thin trade. October ethanol settled 1.5 cents lower at US$1.72 per gallon and November also ended down 1.5 cents, at US$1.695.