October 11, 2007

 

CBOT Corn Review on Wednesday: Higher on soy, technicals, position squaring

 

 

Chicago Board of Trade corn futures settled higher Wednesday, boosted by the double-digit gains in soybeans and light technical support, analysts said.

 

December corn settled 4 3/4 cents higher at US$3.47 1/4 per bushel, with March also ending up 4 3/4 cents, at US$3.64 1/4.

 

Corn had a modest technical recovery, said Shawn McCambridge, senior grain analyst at Prudential Financial in Chicago. The market had been oversold coming into Wednesday's trade and there was a general lack of selling interest ahead of Friday's U.S. Department of Agriculture reports, he said.

 

Soybean futures provided underlying support as talk that the government will reduce harvested soybean acres on Friday and short covering boosted prices.

 

November soybeans settled 18 cents higher at US$9.68 1/4 per bushel.

 

With the production report on Friday expected to show an increase in supplies, some market participants have squared up their positions and are waiting on the data, with corn having few fresh inputs to trade currently, said McCambridge.

 

The average production estimate for the 2007-08 crop year was 13.459 billion bushels, according to a survey of 24 analysts by Dow Jones Newswires, 151 million bushels above the 13.308 billion estimated by the USDA in September.

 

The average yield estimate for the 2007-08 crop year was 157.7 bushels per acre, according to 23 analysts surveyed, compared to the 155.8 bushels estimated in September by the USDA.

 

Stronger outside markets provided additional support with metals and crude oil higher and the weaker dollar also a positive for prices, an E-CBOT trader said.

 

Price direction on Thursday will depend on what soybeans and wheat do, as there is no export sales report until Friday, the E-CBOT trader said.

 

Commodity fund buying was estimated at 6,000 contracts.

 

In options trading, Rand Financial sold 2,500 December US$3.40 puts and 2,500 December US$3.50 calls.

 

On daily technical charts, electronically traded December traded an "inside day," between the high and low established in Tuesday's session.

 

Oat futures ended higher, underpinned by spillover strength from the rest of the floor despite light fund selling, an analyst said.

 

December oats settled up 2 1/2 cents to US$2.74 per bushel.

 

Ethanol futures ended lower in very thin activity. November ethanol fell 1 cent to US$1.545 per gallon and December also settled 1 cent lower at US$1.545.