September 29, 2007

 

CBOT Corn Review on Friday: Down sharply on larger US corn stocks

 

 

Chicago Board of Trade corn futures settled sharply lower Friday as a larger-than-expected quarterly corn stocks report pressured prices with end-of-month and end-of-quarter position squaring also pushing futures lower, analysts said.

 

December settled 13 3/4 cents lower at US$3.73 per bushel and March fell 13 cents to US$3.89 1/4.

 

"The stocks report was larger than what the market expected and corn saw some consolidation from recent sharp gains and ahead of month-end," said Brad Kjar, manager at Altonne Grain in Altonne, N.D.

 

The U.S. Department of Agriculture reported that quarterly corn stocks as of Sept. 1 were 1.304 billion bushels, above the average analyst estimate of 1.147 billion as well as the 2006-07 carryover estimate of 1.142 billion in the September supply and demand report.

 

"The corn number was bigger than expected and there is probably more of that to come as yields across the U.S. Midwest are coming in better than expected," said Kjar.

 

Although wheat futures made another new all-time high Friday, price volatility spilled over into corn as sharp gains in wheat helped trim corn losses after midsession though late weakness in wheat helped pressure corn again near the close, a trader said.

 

Speculative selling, thought to be related to month-end and quarter-end positioning also weighed on prices with commodity fund selling estimated at 8,000 contracts.

 

Price direction on Monday will be influenced by the direction of wheat futures overnight trading Sunday as well as weekend corn yield reports as harvesting should be active with dry weather expected in most of the U.S. Midwest, an analyst said.

 

On daily technical charts, electronically traded December corn settled below its 200-day moving average but finished above its 10-day moving average.

 

In options trading, MF Global bought 5,000 December US$3.60 puts and sold 1,500 December US$4.00 calls.

 

Oat futures ended higher in choppy trade as commodity funds were on both sides of the market, selling oats early and then buying them on the close, an analyst said. The strength in the Canadian dollar also supported oats as it deters hedging by Canadian producers, the analyst said.

 

December oats settled 4 cents higher at US$2.89 3/4 per bushel.

 

Ethanol futures ended mixed in thin trade. October ethanol settled .001 cent higher at US$1.55 per gallon and November rose .007 cent to US$1.528.

 

On Friday afternoon, the Commodity Futures Trading Commission is scheduled to release the commitments of traders report for the period ending Sept. 25.