October 9, 2007

 

CBOT Corn Review on Monday: Settles lower on wheat, soy spillover

 

 

Chicago Board of Trade corn futures settled lower Monday as limit-down losses in wheat futures and moderately lower soybean futures pressured prices, analysts said.

 

December corn settled 2 1/2 cents lower at US$3.39 3/4 per bushel, with March ending 2 3/4 cents lower at US$3.56 1/4.

 

Overall trading activity was slow due to the Columbus Day holiday.

 

Corn fell as the steep declines in wheat and the losses in soybeans pushed the market lower in the absence of fresh news, a commission house analyst said. December wheat settled 30 cents lower at US$8.60 per bushel and November soybeans retreated 15 cents to US$9.25 1/2.

 

Additional price weakness emerged as speculative long holders continue to exit their positions, the commission house analyst said. Commodity fund selling was estimated at 5,000 contracts.

 

Nearby crude oil futures sold off sharply and metals futures were also weaker on the day. Some of the weakness in the grains also came from a stronger U.S. dollar. A stronger U.S. currency tends to dampen buying enthusiasm by foreign importers, an E-CBOT trader said.

 

Continued reports of favorable yields after an active harvest weekend in much of the U.S. Midwest added to the negative tonnee, a trader said. Losses were trimmed in late trade by light short covering ahead on the closing bell, the E-CBOT trader said.

 

Price direction on Tuesday will depend on what wheat does in overnight trade, any potential export news and the direction of the U.S. dollar, an analyst said.

 

On daily technical charts, electronically traded December corn remained below its major moving averages and settled at its lowest level since Sept. 6.

 

In options trading, RJ O'Brien bought 4,000 December US$3.50 calls, and ADM bought 2,000 December US$4.00 calls.

 

Oat futures settled lower in light activity as spillover selling from corn weighed on prices, a trader said. Activity was thin as Canada was on holiday and the U.S. government was closed, the trader noted.

 

December oats settled 2 1/2 cents lower at US$2.70 1/2 per bushel.

 

Ethanol futures settled lower in very light activity. November ethanol fell 3.4 cents to US$1.545 per gallon and December declined 3.8 cents to US$1.545.

 

Tuesday the U.S. Department of Agriculture is scheduled to release the weekly export inspections and the weekly crop progress report.