October 23, 2007

 

CBOT Corn Review on Monday: Settles lower as outside markets weigh

 

 

Chicago Board of Trade corn futures finished moderately lower Monday but well above session lows as weaker outside markets and the lack of fresh positive news pressured prices, analysts said.

 

December corn ended 5 3/4 cents lower at US$3.64 1/2 per bushel.

 

Corn was under pressure the entire session mainly from the outside inflationary markets with crude oil, gold and silver all suffering sharp losses, said Brian Hoops, president of Midwest Market Solutions in Yanktonne, S.D. The U.S. dollar was sharply higher and a weaker stock market added to the poor tonnee, Hoops said.

 

Early fund selling added to the market's downward bias with fund selling estimated at 4,000 contracts.

 

A late rebound in wheat futures to sharply higher prices from large losses set early and a retracement in soybean futures from earlier losses helped corn trim its declines, a commercial analyst said. December wheat jumped 15 1/2 cents to US$8.71 per bushel and January soybeans ended down 7 1/2 cents at US$9.93 3/4.

 

The absence of fresh news also limited buying interest with the weekly export inspections released during the session having little impact, a trader said. The U.S. Department of Agriculture reported that weekly corn inspections for the period ending Oct. 18 were 39.345 million bushels, in line with the 39-44 million expected by analysts.

 

Corn's price direction Tuesday will depend on what occurs in the outside markets, an analyst said. But the fact that wheat ended higher and corn settled lower is not a bullish sign for corn price direction Tuesday, the analyst noted.

 

On daily technical charts, open-auction December corn filled an upside price gap to the downside but settled above it while remaining below its 200-day moving average.

 

In options trading, FCStonnee bought 1,000 December US$4.30 calls.

 

Oat futures settled lower as early fund selling pressed prices for most of the session, with losses trimmed late on the rally in nearby wheat futures, an analyst said.

 

December oats ended 2 1/2 cents lower at US$2.79 1/2 per bushel.

 

Ethanol futures finished higher in modest activity. November ethanol settled up 3 cents at US$1.69 per gallon and December rose 1.8 cents to US$1.678.

 

Monday, the USDA is scheduled to release the weekly crop progress report. Analysts expect the U.S. corn harvest at 60%-65% for the week ended Oct. 21. Last week 53% of the crop was harvested.