October 17, 2007

 

CBOT Corn Review on Tuesday: Settles with small losses in choppy trade

 

 

Chicago Board of Trade corn futures ended with thin losses Tuesday in choppy activity, analysts said.

 

It was a "turnaround Tuesday type of trading session," said Jason Britt, an analyst with Central States Commodities in Kansas City.

 

December corn fell 1 1/2 cents to US$3.60 1/2 per bushel.

 

"After the recent strong move higher it was not surprising to see some profit-taking occur in corn," said Britt.

 

Light resistance near the US$3.62 level on daily technical charts helped lead to speculative selling, with corn falling to its lows of the session early, an analyst said. Commodity prices in general were lower with the exception of crude oil, and the higher price of crude did not supply much support to corn, the analyst said.

 

Wheat futures were volatile throughout the day but provided some spillover support to corn when wheat staged a recovery near midday from steep losses helping trim corn weakness near the close, an E-CBOT trader said.

 

Recent news that construction of several ethanol plants was put on hold due to poor market conditions reminded participants that domestic demand for corn is slowing, a trader said.

 

The market also discounted reports that the European Union would approve three varieties of GMO corn, with commodities firm FC Stonnee noting in a newsletter to clients that corn grown in the U.S. whether or not genetically modified is not separated at grain elevators, so the approval of just three types of GMO corn won't have much impact on any possible U.S. exports.

 

Market direction Wednesday will depend on what happens in outside markets and to wheat futures, a trader said.

 

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

 

In options trading, Citigroup bought 500 May US$4.20 calls and sold 500 May US$3.60 puts. The firm also bought 1,000 March US$4.10 calls and sold 1,000 March US$3.50 puts.

 

Oat futures settled with mild losses as light speculative liquidation weighed on values, an analyst said.

 

December oats settled 2 cents lower at US$2.76 per bushel.

 

Ethanol futures ended slightly higher in very thin trade. November ethanol gained 1 cent to US$1.61 per gallon and December also ended 1 cent higher at US$1.61.