October 21, 2006

 

CBOT Corn Review on Friday: Lower in choppy activity

 

 

Chicago Board of Trade corn futures settled lower Friday in quiet, choppy trading as position squaring ahead of the weekend and the lack of fresh inputs limited activity, sources said.

 

December corn declined 3 1/4 cents to US$3.12 3/4 per bushel and March fell 2 1/4 cents to US$3.24 3/4. e-CBOT day session volume in December was 30,741.

 

With the move to recent highs, there has been enough cash corn movement to put a halt to the rally, said Don Roose, president of U.S. Commodities in West Des Moines, Iowa.

 

In addition, technically the market has turned soft as the recent bullish news has saturated the market and it needs to pull back a little bit, he added.

 

Losses in wheat futures added to the poor tonnee, sources noted. Wheat has been the leader in the grains and it broke down earlier in the week and ended lower Friday as well, sources added.

 

December wheat settled 8 cents lower at US$5.05, well below its high of US$5.57 set on Tuesday.

 

The absence of speculative buying also impacted the market, a commission house analyst noted. "It looks like the funds took the day off," he said.

 

On daily open auction technical charts, December remained above its major moving averages, but settled at its lowest level in over a week.

 

Buyers Friday included Man Financial, which bought 400 March; JP Morgan, which bought 200 December and 100 July; and Fimat, which bought 200 July.

 

Fimat sold 400 December and 300 July, and Rand sold 200 July.

 

Overall commodity fund selling was estimated at 500 contracts.

 

In options trading, Man Financial bought 1,000 December 2007 US$2.70 puts and sold 1,000 December 2007 December US$2.60 puts.

 

Oat futures ended lower in thin trade, described by one trader as the "lightest volume on the week."

 

Technically, the market looks weak and the funds have been absent to support the market on the recent break. Oats have fallen below some moving averages and "it's like gravity," the trader said.

 

December oats settled 4 3/4 cents lower at US$2.24 1/4 cents per bushel and March lost 4 1/4 cents to US$2.30 3/4.

 

Ethanol futures finished slightly higher in light trade. November settled 3 cents higher at US$1.99 per gallon. December also ended up 3 cents to US$1.99.

 

On Friday afternoon, the Commodity Futures Trading Commission is scheduled to release the Commitments of Traders Report for the period ended Oct. 17. On Monday, the USDA is scheduled to release the weekly export inspections at 10 a.m. CDT and the weekly crop progress report at 3 p.m. CDT (2000 GMT).