November 13, 2007

 

CBOT Corn Review on Monday: Settles lower as outside markets retreat

 

 

Chicago Board of Trade corn futures ended moderately lower Monday as declines in outside inflationary markets pressured prices throughout the session, analysts said.

 

December corn declined 7 3/4 cents to US$3.79 per bushel.

 

Crude oil fell over US$1.92 per barrel and gold and silver futures posted heavy losses.

 

"Corn has been rallying to the upside recently on inflationary pressures and it made sense when the outside markets deflated Monday that corn would follow them lower as well," said Don Roose, president of US Commodities in West Des Moines, Iowa.

 

December gold settled over US$27 lower at US$807.70 per ounce, and December silver dropped 78.3 cents to US$14.762 per ounce.

 

There wasn't much else to trade on besides the outside markets with the absence of fresh news as the U.S. Department of Agriculture was closed for Veterans Day and some participants extended their weekend, a trader said.

 

Modest gains in wheat futures for most of the day also kept corn under light pressure on thin wheat-corn spreading. The December wheat-December corn spread has narrowed over US$2 from its high set in early October, the trader said.

 

A stronger U.S. dollar versus other currencies also limited buying interest as a higher valued dollar makes U.S. grain exports more costly for foreign buyers, a commission house analyst said.

 

Corn's market direction Tuesday will be set by what happens in metals, crude oil and the dollar, the commission house analyst said.

 

On daily technical charts, December settled below its 10-day moving average for the first time since Oct. 24.

 

In options trading, MF Global bought 1,500 December US$4.00 calls and JP Morgan bought 1,000 December US$3.70 puts.

 

In open auction activity, fund selling was estimated at 5,000 contracts.

 

Oat futures ended lower as spillover selling from corn kept prices on the defensive, an analyst said. Light commission house buying in March limited the downside, the analyst said.

 

December oats slipped 4 cents to US$2.85 1/2 per bushel and March fell 3 3/4 cents to US$3.00.

 

Ethanol futures ended lower. December ethanol settled 1.2 cents lower to US$1.86 per gallon and January retreated 2.3 cents to US$1.805.

 

On Tuesday, the USDA is scheduled to release the weekly export inspections report at 11:00 a.m. EST. The weekly crop progress report is due out at 4 p.m. EST for the week ended Nov. 10.