November 2, 2007

 

CBOT Corn Review on Thursday: Down on outside market losses, technical selling

 

 

Chicago Board of Trade corn futures settled lower and nearer session lows Thursday as weakness in outside markets and technical selling pressured prices.

 

December corn declined 6 3/4 cents to US$3.68 3/4 per bushel.

 

Commodities in general were weak and corn was no exception, an analyst said. The commodity bull market has been pumped up and it unraveled a bit Thursday, the analyst added. Crude oil, gold and silver were all lower and that contributed to early weakness.

 

Nearby crude oil made a new all-time high in overnight trading but settled down US$1.04 at US$93.49 per barrel.

 

The dollar rebounded against several currencies which also limited buying interest, a commission house analyst said.

 

Technical selling also added to the downside with weak longs exiting the market following early steep losses in crude oil, the commission house analyst said.

 

On daily technical charts, electronically traded December settled below its 200-day moving average, unable to trade above technical resistance at US$3.80 per bushel.

 

Weaker-than-expected export sales also contributed to the poor tonnee with corn sales at a marketing year low. The U.S. Department of Agriculture reported export sales were 635,300 metric tonnes, a marketing year low and below the 700,000-to-1.2 million expected by analysts.

 

Spillover selling from a late sell-off in wheat futures added to the losses with spot-month December wheat ending 29 3/4 cents lower at US$7.78 1/4 per bushel, its lowest closing price since late August.

 

Market direction Friday will be determined by a number a factors, an E-CBOT trader said. Energies, metals the dollar and equity markets may all influence prices, the trader said.

 

Fund selling was moderate and estimated at 4,000 contracts.

 

In options trading, UBS sold 2,000 March US$4.00 calls and Man Financial bought 4,000 December US$3.70 calls and sold 4,000 December US$3.80 calls and 4,000 December US$3.50 puts.

 

Oat futures ended slightly lower as liquidation in December kept the market on the defensive, an analyst said. Weakness in the other grains did not have much influence on oats, the trader added.

 

December oats settled 1 cent lower at US$2.86 3/4 per bushel and March ended down 1/2 cent to US$3.00 1/2.

 

Ethanol futures finished mixed. November ethanol rose .005 cent to US$1.795 per gallon and December declined 2.5 cents to US$1.725.

 

In other corn news, analyst firm FCStonnee is scheduled to release its estimate of U.S. corn production and yields after the close and Informa Economics is expected to release its estimates Friday morning.