October 4, 2006

 

CBOT Corn Review on Monday: Settles lower on profit taking

 

 

Chicago Board of Trade corn futures ended lower Tuesday, weighed down by profit taking after recent price strength, sources said.

 

December ended 3 3/4 cents lower at US$2.64 cents per bushel, and March declined 2 3/4 cents to US$2.78. e-CBOT day session volume in December was 10,913 contracts. The system was down over 1 1/2 hours during the trading session.

 

Corn was overdone technically on the upside and was due for some profit taking, a commission house analyst said.

 

Light commodity fund selling also added to the weakness, with fund selling estimated at 4,000 contracts.

 

Favorable harvest weather over the next several days, particularly in the western U.S. Midwest also added to the negative tonnee with ideas that producers could make could good harvest progress this week, he added.

 

Sharply lower crude oil, and metals futures also limited buying interest, a floor trader noted. "All in all, it was a pretty dull day," the trader said.

 

A floor source noted the price weakness in wheat futures as another factor. Corn has been trending higher with the recent gains in wheat and wheat futures came under pressure Tuesday, the source said.

 

December wheat settled 6 1/2 cents lower at US$4.39 1/2.

 

On open auction technical charts, December gapped open lower and was unable to fill the gap. December remains above most major moving averages.

 

Buyers Tuesday included Fortis, which bought 2,500 December, JP Morgan which bought 1,300 December, Fimat, which bought 1,000 December, and UBS, which bought 1,000 December.

 

Tenco sold 1,000 December, JP Morgan sold 1,000 March, Merrill Lynch sold 1,000 December, Man Financial sold 1,000 December and ADM Investor Services sold 1,000 December.

 

In spread trading UBS bought 1,300 Dec 2006-Dec 2007. Oat futures settled slightly lower in quiet trade as spillover weakness from corn and wheat weighed on the market, a floor source said.

 

December oats slipped 3/4 cent to US$2.06 3/4 per bushel and March ended down 1 3/4 cents at US$2.14 1/4.

 

Ethanol futures settled higher in light trade. October ethanol rose 1.7 cents to US$1.812 per gallon and November gained 1.4 cents higher at US$1.797.