October 25, 2007

 

CBOT Corn Review on Wednesday: Lower on wheat sell-off, technical selling

 

 

Chicago Board of Trade corn futures ended with modest declines Wednesday with limit down losses in nearby wheat futures and light technical selling keeping the market on the defensive, an analyst said.

 

December corn fell 4 1/2 cents to US$3.56 1/2 per bushel.

 

"Spillover selling from wheat had a negative impact on corn," said Bill Nelson, associate vice president at AG Edwards & Sons in St. Louis. December wheat fell 30 cents to US$8.11 per bushel its lowest settlement price since Sept. 4.

 

Technical selling added to the weakness with Dec slipping below its 10-day moving average on daily technical charts.

 

The absence of fresh news also dampened buying enthusiasm with export news absent, Nelson said.

 

Forecasts predicting drier weather next week in much of the U.S. Midwest added to the poor tonnee with active harvesting expected.

 

The outlook in the central U.S. has mostly above-normal temperatures and below-normal rainfall for the next 10 days, said DTN Meteorlogix Weather. Based on the forecast harvesting of corn and soybean crops should roll, a trader noted.

 

A weaker U.S. dollar and higher crude oil prices were not able to provide much support, compared to recent sessions, a commission house analyst said.

 

Market direction Thursday will be determined by weekly export sales, the strength or weakness in outside markets and what happens in wheat, an E-CBOT trader says.

 

Commodity fund selling was estimated at 2,500 contracts.

 

On daily technical charts, electronically traded December corn settled below its 10-day and 50-day moving averages and right at its 20-day moving average.

 

In options trading, MF Global bought 2,000 December US$3.80 calls and sold 2,000 December US$3.40 puts.

 

Oat futures settled lower as spillover from losses in wheat and corn pressed the market as did light fund selling, an analyst said. "Commodities in general didn't have a lot of friends Wednesday," the analyst said.

 

December oats ended down 3 3/4 cents at US$2.74 1/2 per bushel.

 

Ethanol futures ended higher. November ethanol gained 3 cents to US$1.73 per gallon and December gained .009 cents to US$1.694.

 

Thursday, the U.S. Department of Agriculture is scheduled to release the weekly export sales report at 8:30 a.m. EDT. Analysts expect sales between 950,000 and 1.4 million metric tonnes for the week ended Oct. 18.