November 10, 2007

 

CBOT Corn Review on Friday: Lower after USDA data; soy complex supports

 

 

Chicago Board of Trade corn futures settled with modest losses Friday as the absence of any bullish news in the U.S. Department of Agriculture's crop report and early weakness in outside markets combined to weigh on prices, analysts said.

 

December corn fell 2 3/4 cents to US$3.86 3/4 per bushel.

 

Losses were limited by strength in soybeans and soyoil, with soyoil rallying to its highest price levels in over 30 years. December soyoil settled 93 points higher at 45.08 cents per pound. January soybeans settled 14 3/4 cents higher at US$10.56 per bushel, after making a new contract high, and at its highest level on monthly continuation charts since May 2004.

 

Corn opened lower despite calls for a higher opening as people looked to the outside markets for direction instead of the government reports, said Bob Anderson, an analyst at Commodity Services in Des Moines, Iowa.

 

The USDA estimated the 2007 U.S. corn crop at 13.168 billion bushels, below the 13.318 billion estimated in October as well as the average analyst estimate of 13.261 billion. The yield per acre was pegged at 153.0 bushels, down from 154.7 projected in October and falling short of average estimate of 154.1.

 

"Corn is still following crude oil, the metals and the dollar - the three horses of the apocalypse - and when these markets were flat and looked like they might be running out of steam, people decided to take profits," Anderson said. The USDA reports did not change the market's fundamentals, as there remains plenty of corn to get through next summer, said Anderson.

 

U.S. ending stocks were trimmed 100 million bushels to 1.897 billion bushels from the 1.997 billion estimated in October. The figure was below the 1.932-billion-bushel average analyst estimate.

 

Corn also drew support from stabilizing stock markets, a trader said. Equity markets were sharply lower but stabilized at those levels, trimming aggressive selling interest in commodities in general, the trader said. A rally in crude oil prices also limited the downside, the trader added.

 

Price direction on Monday will be determined by outside market influences, an analyst said.

 

On daily technical charts, December remained above its major moving averages.

 

In options trading, Rand Financial sold 3,000 December US$3.90 calls and RJ O'Brien sold 1,000 March US$3.90 calls.

 

In open auction activity, fund selling was estimated at 3,000 contracts.

 

Oat futures settled lower with the funds bear spreading December-March, a trader said. Weaker wheat values for most of the day pressed oat values lower, an analyst said.

 

December oats fell 6 cents to US$2.89 1/2 per bushel, and March declined 5 cents to US$3.03 3/4.

 

Ethanol futures settled higher. December ethanol gained 1.7 cents to US$1.872 per gallon, and January rose 2.3 cents to US$1.828.

 

Friday afternoon, the Commodity Futures Trading Commission is scheduled to release the commitment of traders report for the week ended Nov. 9.