October 2, 2007

 

CBOT Corn Review on Monday: Lower on light speculative selling

 

 

Chicago Board of Trade corn futures ended lower Monday, undermined by the lack of fresh news and follow through speculative selling from last week's stocks data, analysts said.

 

December settled 4 1/4 cents lower at US$3.68 3/4 per bushel and March fell 3 3/4 cents to US$3.85 1/2.

 

Corn was undermined by light spillover selling from the U.S. Department of Agriculture report Friday, said Don Roose, president of US Commodities in West Des Moines, Iowa. On top of the stocks report, farmers continue to report yields that are uniformly large which also acted as a cap to the upside, Roose said.

 

Higher wheat futures prices did provide underlying support for corn prices, but not as much as in past sessions, an E-CBOT trader said. December wheat settled 13 1/2 cents higher at US$9.52 1/2. Sharply lower crude oil prices also weighed on corn, given corn's role in producing ethanol, the E-CBOT trader said.

 

Light technical and speculative selling near the close also added late pressure with session lows set in late activity, a trader said.

 

Weekly corn export inspections were in line with analyst expectations and had little impact, an analyst said. The USDA reported that corn inspected for export totaled 42.994 million bushels, with the range of 37-45 million bushels expected by analysts.

 

Price direction on Tuesday will depend on the harvest progress Monday afternoon and the overnight weather in Australia and its impact on wheat, a trader said.

 

On daily technical charts, electronically traded December corn settled at its lowest level since Sept. 19 and below its 200-day and 10-day moving averages.

 

In open auction trading, commodity fund selling was estimated at 1,000 contracts.

 

In options trading, Fimat bought 2,000 December US$3.75 calls and sold 1,000 March US$4.00 calls.

 

Oat futures settled with thin losses as light hedge related pressure weighed on prices in narrow range activity, a trader said.

 

December oats settled 3/4 cent lower at US$2.89 per bushel.

 

Ethanol futures ended mixed in modest trade. October ethanol settled 0.004 cent lower at US$1.546 per gallon and November gained 1.1 cents to US$1.539.

 

Monday afternoon the USDA is scheduled to release the weekly crop progress report at 4:00 p.m. EDT. Analysts expect the U.S. corn harvest between 30%-35% complete for the period ending Sept. 30. Last week, 22% of the crop was reported harvested.