October 27, 2006

 

CBOT Corn Review on Thursday: Mostly higher; market consolidates

 

 

Chicago Board of Trade corn futures finished mostly higher Thursday as the market consolidated, sources said. Activity was two-sided after the recent move to new-life-of-contract highs.

 

December corn ended unchanged at US$3.27 per bushel and March gained 1/4 cent to US$3.39 1/2. e-CBOT day session volume in December was 43,734 contracts.

 

Corn was stuck between the weaker wheat values and the gains in soybeans Thursday, a floor trader said.

 

December wheat settled 9 1/4 cents lower to US$5.07 1/2, while January soybeans rose 6 1/4 cents to US$6.41 3/4. December wheat has retreated almost 50 cents from its high last week.

 

The corn market consolidated, but there continues to be a battle for acreage between corn and soybeans, said Bill Nelson, assistant vice president with AG Edwards & Sons in St. Louis. It appears that wheat acres will increase next year, so the additional corn acres needed have to come from somewhere and when soybeans moved higher, corn prices firmed, he said.

 

A pick up in hedge related selling was a negative for prices, a commission house trader said, but the lack of strong selling interest kept the market within the ranges established earlier in the session, he noted.

 

Better than expected weekly export sales were termed "supportive," an analyst said.

 

The USDA reported weekly corn export sales were 1.046 million metric tonnes, slightly above analyst's estimates.

 

Corn needs to consolidate a bit given its lengthy rally but given the demand outlook for corn, there continues to be not much interest in selling it, a floor source said.

 

December's 14-day Relative Strength index remained at 74.71.

 

Buyers Thursday included ABN Amro, which bought 1,000 December, Calyon Financial, which bought 400 December, Fimat, which bought 400 December, and Rand Financial, which bought 300 July.

 

JP Morgan sold 800 March, 800 July and 1,000 December, Citigroup sold 800 March, Fimat sold 400 July and Man Financial sold 500 December.

 

Overall commodity fund selling was estimated at 4,000 contracts.

 

In options trading, Rand Financial bought 2,000 December US$3.30 calls, 2,000 December US$3.70 calls and sold 4,000 December US$3.50 calls.

 

Oat futures settled lower as light fund buying was offset by commission house and commercial related selling, floor sources said.

 

December oats fell 2 1/4 cents to US$2.34 1/2 cents per bushel and March ended down 1 1/4 cents to US$2.41.

 

Ethanol futures finished moderately lower in thin trading. November fell 6.6 cents to US$2.114 cents per gallon. December declined 7.3 cents to US$2.077.