November 6, 2007

 

CBOT Corn Review on Monday: Modestly lower, consolidates in light trade

 

 

Chicago Board of Trade corn futures settled lower Monday, consolidating in modest trading as weaker energy prices helped limit the upside in corn, analysts said.

 

December corn declined 1 3/4 cents to US$3.75 1/4 a bushel and nearby crude oil ended down US$1.87 at US$94.06 a barrel.

 

It was a slow trading session, with market players consolidating positions ahead of Friday's U.S. Department of Agriculture reports, said Brian Hoops, president of Midwest Market Solutions in Yanktonne, S.D.

 

Crude oil was weak for much of the session and as a result corn was lower as it has been influenced by the energy markets more than any other factor recently, an analyst said.

 

A rebound in precious metal futures and a rally in wheat futures helped corn recover from losses at the opening, but the lack of additional buying interest limited the upside, a commission house analyst said.

 

On daily technical charts, December traded an inside day, within Friday's price range, unable to garner much strength in either direction, said Hoops. December settled above its 200-day moving average.

 

Light wheat-corn spreading also kept corn futures on the defensive, Hoops said. The spread between December wheat and December corn has recently narrowed to US$4.00 from US$5.75, but some premium went back into wheat Monday, said Hoops.

 

Overall weakness in corn was held in check by strong near-term demand, with the USDA announcing a sale of 120,000 metric tonnes of U.S. corn to Egypt ahead of the opening and higher-than-expected export inspections, a trader said.

 

Corn inspected for export totaled 56.724 million bushels, well above analyst estimates and the 45.742 million bushels inspected last week.

 

Price direction in corn Tuesday will depend on outside markets, with harvest progress also influencing direction, a trader said. Analysts expect 83% to 85% of the U.S crop to be harvested for the week ending Nov. 4.

 

Commodity fund buying was estimated at 1,000 contracts.

 

In options trading, ADM bought 1,000 December US$3.80 calls and Rand bought 1,000 December US$3.90 calls.

 

Oat futures settled lower as light fund selling pressed the market early and never really stopped, an analyst said.

 

December oats ended 2 1/4 cents lower at US$2.90 3/4 a bushel and March fell 3 cents to US$3.03 a bushel.

 

Ethanol futures ended unchanged to higher in light trade. November ethanol gained 5.5 cents to US$1.875 a gallon and December ended unchanged at US$1.78.

 

Monday afternoon, the U.S. Department of Agriculture is scheduled to release the weekly crop progress report at 4 p.m. EST.