November 4, 2006

 

CBOT Corn Review on Friday: Ends lower; consolidates after rally

 

 

Chicago Board of Trade corn futures settled modestly lower Friday in quiet trading compared to the record volume traded Thursday as the market consolidated its gains, sources said.

 

December corn ended 2 1/2 cents lower to US$3.42 1/4 cents per bushel and March slid 2 1/4 cents to US$3.57. E-CBOT day-session volume in December was 63,039 contracts.

 

The market looked a little tired and took a breather ahead of the weekend after this week's rally, a commission house trader said.

 

A late move to the upside based on spillover strength from soybeans was unable to be sustained and prices quickly retreated back to lower levels, sources added.

 

Next week the U.S. Department of Agriculture production and supply/demand reports are due out and participants appear to be consolidating their positions after the strong contra-seasonal rally, the trader added.

 

Since reaching its contract low on Aug. 18, December corn has rallied over US$1 on strong domestic demand and production concerns.

 

Although overall volume was quiet, spread trading was active with participants, thought to be funds, rolling out of their nearby December positions into December 2007, an analyst said.

 

In spread trading, Deutsche Bank bought 2,500 December 2007-December 2006, Advantage bought 1,500 December 2007-December 2006 and UBS bought 2,500 December 2006-December 2007.

 

On daily open auction technical charts, December partially filled an upside gap created Thursday and remained well above its major moving averages.

 

Buyers on Friday included Rand Financial, which bought 1,000 December; JP Morgan, which bought 700 July; FC Stonnee, which bought 700 December and 300 July; and the USA Trading Division of Man Financial, which bought 600 July.

 

ADM Investor Services sold 1,000 December, JP Morgan sold 800 December, Calyon Financial sold 500 December and Rand Financial sold 500 December.

 

Overall commodity fund selling was estimated at 2,000 contracts.

 

Oat futures finished higher as commission house buying boosted prices in a quiet trading session, a floor trader said.

 

December oats settled up 2 3/4 cents to US$2.58 1/4 cents per bushel and March gained 3 cents to US$2.67.

 

Ethanol futures settled mixed in very light trading. The November contract, which did not trade, settled 1.5 cents higher to US$2.05 cents per gallon. The December contract also rose 1.5 cents to US$2.02.

 

Friday afternoon the Commodity Futures Trading Commission is scheduled to release the weekly commitment of traders report for the period ending Oct. 31.

 

On Monday, the USDA is scheduled to release the weekly export inspections report at 10 a.m. CST and at 3 p.m. CST (1330 GMT), the weekly crop progress is scheduled for release.