October 12, 2007

 

CBOT Corn Review on Thursday: Slips on position squaring before reports

 

 

Chicago Board of Trade corn futures ended lower Thursday as the market looked ahead to Friday's U.S. Department of Agriculture crop production and supply/demand reports, analysts said.

 

December corn settled 3 1/2 cents lower at US$3.43 3/4 per bushel, with March also down 3 1/2 cents, at US$3.60 3/4.

 

"People are concerned that the government will come out with a bearish production estimate," said Vic Lespinasse, an analyst at Illinois Grain.

 

An early attempt to breach technical resistance around US$3.50 in December failed, encouraging commodity fund selling, an E-CBOT trader said.

 

Commodity fund selling was estimated at 4,000 contracts.

 

"Big crops tend to get bigger and that is the concern about Friday's reports," the E-CBOT trader said.

 

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.

 

Late in the session, a move to limit-up in wheat and stronger soybean prices helped trim the losses in corn, a trader said. However, the inability of corn to trade higher led to ideas the market expects the report will be bearish, a commission house analyst said. December wheat settled 30 cents higher at US$8.83 per bushel and January soybeans rose 14 1/4 cents to US$10.01.

 

In options trading, Tenco bought 1,000 November US$3.40 calls and Fimat bought 1,000 December US$3.40 puts.

 

Oat futures ended fractionally higher in quiet activity as the market waits on Friday's USDA reports for direction, a trader said. Commodity funds were on both sides of the market, an analyst said.

 

December oats settled 3/4 cent higher at US$2.74 3/4 per bushel.

 

Ethanol futures ended higher. November ethanol gained 2.5 cents to US$1.57 per gallon and December also rose 2.5 cents to US$1.57.

 

On Friday, the USDA is scheduled to release the October crop production and supply/demand reports at 8:30 a.m. EDT (1230). The weekly export sales report is also scheduled for release at 8:30 a.m. EDT. The Commodity Futures Trading Commission is scheduled to release the commitments of traders report for the period ended Oct. 9, Friday afternoon.