October 19, 2006

 

CBOT Corn Review on Wednesday: Ends lower on profit taking

 

 

Chicago Board of Trade corn futures settled modestly lower Wednesday as profit taking weighed on futures after the recent sharp rally, sources said.

 

December corn ended 5 1/2 cents lower at US$3.15 1/2 cents per bushel, and March fell 4 cents to US$3.25 1/4. E-CBOT day-session volume in December was 45,539 contracts.

 

There are only nine trading days left in the month and there was some profit taking from large trading funds Wednesday, said Tim Hannagan, head grain analyst with Alaron Trading in Chicago. December corn has rallied almost 95 cents from mid-August and the funds are technically oriented.

 

The inability of December to move above resistance at US$3.30 was an indication for the funds to take some profits, he added.

 

There is nothing fundamental for the market to sink its teeth into but it's the beginning of month-end profit taking by the funds, he said.

 

Given the scope of the recent rally, Wednesday's declines were not that big, a floor trader noted.

 

The losses in wheat along with a late decline in crude oil added weight to the market, a commission house analyst said. December wheat skidded 18 1/2 cents lower to US$5.12 1/2, while crude oil was over US$1 lower at the close.

 

On daily open-auction technical charts, December remained above its major moving averages.

 

Buyers on Wednesday included Fortis, which bought 800 December; JP Morgan, which bought 500 December and 700 March; UBS, which bought 500 December and 400 July; and Citigroup, which bought 600 March.

 

FC Stonnee sold 1,000 December, JP Morgan sold 400 July, and Fimat sold 300 December and 100 July.

 

In options trading, Man Financial bought 3,500 December US$2.90 puts and sold 3,500 December US$2.70 puts. Man Financial bought 3,500 December US$3.00 calls and sold 3,500 December US$2.80 calls.

 

Oat futures ended moderately lower as spillover weakness from wheat pressured prices, sources said. Activity was two-sided with commission houses on both sides of the market, they added.

 

December oats fell 5 1/4 cents to US$2.33 cents per bushel and March declined 5 1/2 cents to US$2.38 1/2.

 

Ethanol futures settled higher in light activity. November settled .05 higher at US$1.94 per gallon. December also gained .05 to US$1.94.

 

On Thursday, the U.S. Department of Agriculture is scheduled to release the weekly export sales for the week ended Oct. 12.

 

Analysts expect sales between 800,000 and 1.0 million metric tonnes. Sales for the week ended Oct. 5 totaled 1.287 million metric tonnes.