November 1, 2006

 

CBOT Corn Review on Tuesday: Moderately lower on profit taking

 

 

Chicago Board of Trade corn futures settled moderately lower Tuesday and near session lows as month-end profit taking and spillover weakness from lower wheat values weighed on prices, sources said.

 

December corn fell 8 3/4 cents to US$3.20 3/4 cents per bushel and March settled down 8 1/4 cents to US$3.34 3/4. E-CBOT day-session volume in December was 63,982 contracts.

 

"Every bull or bear market needs to take a breather and that's what the corn market did," said John Kleist of Top Third Ag Marketing in Chicago. Corn has been a "sprinter" to the upside and it needed to take a step back after its large rally, he said.

 

The lack of speculative fund support was noted by floor analysts, with some expecting the funds to support their long positions during the session. The funds didn't have to "dress up" their month-end positions because they are already holding good gains and took some of their profits, Kleist added.

 

The market took this opportunity to consolidate some of its gains, a commission house analyst said. In addition, end-of-month bear spreading weighed on the market, and technically, this was not a strong close, he added.

 

Lower wheat values also weighed on the market, with December wheat falling 18 cents to US$4.83, settling below US$5.00 for the time since Oct. 9.

 

There was little fresh news to impact the market and Monday's weekly harvest progress was largely expected, a floor source said.

 

The U.S. Department of Agriculture reported that 68% of the U.S. corn crop was harvested, slightly below analysts' expectations of 69%-73%.

 

On open-auction technical charts, December settled below its 10-day moving average for the first time since Sept. 15.

 

Buyers on Tuesday included Rand Financial, which bought 800 July; JP Morgan, which bought 1,100 July 400 December and 300 March; Citigroup, which bought 600 March and 200 July; and FC Stonnee, which bought 400 December.

 

JP Morgan sold 800 December, Rand Financial sold 400 July, UBS sold 300 December and Fimat Financial sold 300 July.

 

Overall commodity fund selling was estimated at 1,500 contracts.

 

Oat futures ended moderately lower as fund selling, thought to be end-of- month profit taking, and rollover spread trading with participants rolling out of December and into March, pressured prices, sources said.

 

December oats dropped 8 3/4 cents to US$2.34 cents per bushel and March settled 7 cents lower at US$2.45.

 

Ethanol futures settled lower in thin activity. November fell 6.5 cents to 2.015 cents per gallon and December ended down 5 cents at US$1.98.