October 20, 2006

 

CBOT Corn Review on Thursday: Settles modestly higher in thin trade

 

 

Chicago Board of Trade corn futures finished modestly higher Thursday as spillover strength from the overnight session and thin speculative buying interest helped offset disappointing weekly export sales and a lack of additional fresh inputs, sources said.

 

December corn settled 1/2 cent higher at US$3.16 per bushel and March rose 1 3/4 cents to US$3.27. e-CBOT day session volume in December was 42,278 contracts.

 

Early price strength was follow through from the overnight session, said John Kleist of Top Third Ag Marketing in Chicago.

 

However, from the fundamental side, "the market has had the first hint of rationing of demand with the downturn in the weekly sales and stepped-up competition from China," he said.

 

According to sources, China sold over 200,000 metric tonnes of corn to South Korea overnight.

 

The USDA reported weekly export sales were 820,200 metric tonnes for the week ended Oct. 12, near the low end of the range of analysts' estimates of 800,000-1.0 million metric tonnes.

 

The market was in a consolidation mode Thursday, a floor analyst said. Technically, it appears that the market wants to pull back a bit after the recent rally before going higher, he added.

 

Higher prices in outside markets provided a bit of support, a floor trader noted, citing higher crude oil futures.

 

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

 

Buyers Thursday included Calyon, which bought 1,500 December; JP Morgan, which bought 1,000 December; Fortis, which bought 1,000 December; and Tenco, which bought 1,000 March and 500 December.

 

Fimat sold 5,000 December, JP Morgan sold 800 December, RJ O'Brien sold 400 July and Iowa Grain sold 300 December.

 

In spread trading, JP Morgan bought 1,500 July-December. Oat futures settled lower as commission house selling pressured prices, a floor trader said.

 

The selling helped push December down to its moving averages before light buying emerged to trim the losses, he added.

 

December oats lost 4 cents to US$2.29 cents per bushel and March fell 3 1/2 cents to US$2.35.

 

Ethanol futures ended mostly higher in thin activity. November settled 2 cents higher at US$1.96 per gallon. December also ended up 2 cents to US$1.96.

 

On Friday afternoon, the Commodity Futures Trading Commission is scheduled to release the weekly Commitments of Traders Report for the period ended Oct. 17.