November 14, 2006

 

CBOT Corn Review on Monday: Settles modestly lower in choppy trade

 

 

Chicago Board of Trade corn futures settled modestly lower Monday in choppy trading, unable to maintain early gains based on stronger prices overnight as a lack of additional buying interest led to light speculative selling, sources said.

 

December corn settled 3/4 cent lower to US$3.42 1/2 cents per bushel and March ended down 1 cent to US$3.58 1/2. E-CBOT day-session volume in December was 79,605 contracts.

 

There was no news out to support the early gains, and the market ended up giving back the early advances, a floor analyst noted.

 

The short-term commodity trading funds that are more technically oriented bought corn early but there was no follow through and ended up liquidating some of their holdings as the market was unable to extend early advances, said Mike Zuzolo, chief analyst at Risk Management Commodities in Lafayette, Ind.

 

Based on the outside markets, it appeared that the index funds were liquidating some of their nearby positions, he added.

 

"You have to feed a bull market everyday and the market didn't have anything to feed it with," a floor analyst said.

 

Corn had little reaction to the U.S. Department of Agriculture reporting that export inspections were 34.493 million bushels for the week ended Nov. 9, well under the 45-54 million anticipated by analysts.

 

In addition, USDA announced before the opening of day-session trading that Mexico had purchased 110,000 metric tonnes of U.S. corn for delivery in 2006-07.

 

On daily open-auction technical charts, December traded an outside day, with a higher high and a lower low than Friday's price range. December also settled below its 10-day moving average for the first time since Oct. 31.

 

Buyers Monday included Fimat, which bought 400 December; FC Stonnee, which bought 300 March; and Prudential Financial, which bought 300 March.

 

JP Morgan sold 1,200 March, Rand Financial sold 500 December, and UBS sold 300 July.

 

Overall commodity fund buying was estimated at 600 contracts.

 

In spread trading, Fortis bought 2,000 March-December, and Calyon bought 2,000 March-December.

 

In options trading Man Financial bought 2,000 March US$3.30 puts and 1,000 March US$3.20 puts.

 

Oat futures settled higher in thin trade as light commission house buying supported prices, a floor analyst said. Volume was light as it was a holiday in Canada, he added.

 

December oats rose 4 1/4 cents to US$2.64 1/2 cents per bushel and March gained 4 cents to US$2.74 1/2.

 

Ethanol futures ended mixed in very light trade. The December contract did not trade and settled unchanged at US$2.12 cents per gallon. The January contract also didn't trade and rose 3.5 cents to US$2.04 1/2.

 

On Monday afternoon, the Commodity Futures Trading Commission is scheduled to release the commitment of traders report for the period ending Nov. 7. The USDA is scheduled to release the weekly crop progress at 3 p.m. CST (2100 GMT). Analysts expect 88%-90% of the U.S. corn crop has been harvested as of Nov. 12.