November 7, 2006

 

CBOT Corn Review on Monday: Slightly higher in quiet trade

 

 

Chicago Board of Trade corn futures finished at slightly higher levels Monday in choppy, two-sided trade, unable to generate any much momentum higher or lower until light buying interest late in the session helped lift prices, sources said.

 

December corn rose 1 1/4 cents to US$3.43 1/2 per bushel and March gained 1 1/2 cents to US$3.58 1/2. e-CBOT day session volume in December was 54,443 contracts.

 

"It was a herky-jerky trade, a floor analyst said. Corn is waiting on Thursday's U.S. Department of Agriculture reports for direction, and it appeared that the market was not interested in going lower Monday, he added.

 

In a survey conducted by Dow Jones Newswires, the average of 21 analysts' estimates forecast 2006-07 corn production at 10.838 billion bushels, 67 million bushels below the USDA October estimate.

 

The average estimate of the crop's yield by 20 analysts was pegged at 152.5 bushels per acre, below the 154.7 forecast by the USDA in October.

 

The average of 15 analysts estimate 2006-07 ending stocks at 912 million bushels, 84 million bushels below the 996 million estimated in October by the USDA.

 

The reports are scheduled for release at 7:30 a.m. CST.

 

Firm wheat futures prices and stronger crude oil futures also provided thin support, a commission house analyst said.

 

Export inspections of 51.908 million bushels were above analyst expectations of 37 million-47 million bushels but had little market impact.

 

Reports of slightly larger Chinese corn production also had little impact, traders said.

 

China's National Grain and Oils Information Center said Monday that the country's corn production for 2006 is forecast to increase 1.9% on the year to 142 million metric tonnes. This is up 1 million tonnes from last month's estimate as higher production is expected from major growing regions, the Center said.

 

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

 

Buyers Monday included FC Stonnee, which bought 400 July; Calyon Financial, which bought 500 December; Fimat Financial, which bought 200 December; and Iowa Grain, which bought 200 March. JP Morgan sold 600 December; Calyon Financial sold 500 December; and Fimat sold 200 December.

 

Overall commodity fund buying was estimated at 300 contracts.

 

In spread trading, Advantage Futures bought 2,000 December-March and 2,000 Dec 2007-Dec 2006.

 

In options trading, Fimat bought 3,000 December 2007 US$3.00 puts.

 

Oat futures settled higher as funds bought the Mar-Dec spread and commercials sold it as both sides liquidated their December positions, floor sources said.

 

December oats ended 2 3/4 cents higher to US$2.61 per bushel and March gained 3 cents to US$2.70.

 

Ethanol futures ended higher in very thin activity. The December contract settled 5 cents higher to US$2.07 per gallon. The January contract ended up 7.2 cents at US$2.03. On Monday, at 3 p.m. CST (1330 GMT), the weekly crop progress report is scheduled for release. Traders and analysts expect U.S. farmers have harvested 80%-83% of the U.S. corn crop as of Sunday.