November 16, 2006

 

CBOT Corn Review on Wednesday: Reverses early gains; ends modestly higher

 

 

Chicago Board of Trade corn futures settled higher Wednesday but well off earlier levels as the inability of the nearby months to take out recently established new contract highs led to profit taking, sources said.

 

December corn ended 1/2 cent higher at US$3.58 1/4 cents per bushel and March rose 1 cent to US$3.72 1/2. E-CBOT day session volume in December was 85,400 contracts.

 

Late weakness in soybeans and wheat also added to the poor tonnee late, the sources added.

 

January soybeans settled 7 1/2 cents lower at US$6.63 3/4 cents per bushel and December wheat fell 5 cents to US$4.81 1/2.

 

Speculative buying and follow-through strength from the overnight trade pushed prices higher earlier in the session, a floor analyst said. The money flows continue to enter the grain market - that's why the market was higher, he added.

 

Commodity fund buying was estimated at 7,000 contracts.

 

However, corn couldn't rally to new contract highs, with the market weakening as a result, a commission house analyst says.

 

The corn market had decent fund and option-related buying, but it dried up near the close, and the market ended just above Tuesday's settlements, he added.

 

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

 

Buyers on Wednesday included Fimat, which bought 1,600 July and 700 December; JP Morgan, which bought 2,000 July and 1,000 March; UBS, which bought 800 December; and UBS, which bought 300 July.

 

Fimat sold 500 March, ADM Investor Services sold 400 July, Fortis sold 400 July and Tenco sold 300 July.

 

In spread trading, Calyon Financial bought 1,500 December-March.

 

In options trading, Advantage bought 10,000 December US$3.70 calls and sold 2,000 March 2007 US$3.40 puts and 2,000 March US$4.00 calls

 

Oat futures settled lower in modest trading as light selling and the late weakness in corn and wheat weighed on prices, sources said.

 

The funds were absent the market, and if they don't buy it, the market sags, an oat analyst said.

 

December oats fell 1 3/4 cents to US$2.61 1/2 cents per bushel and March declined 1 1/4 cents to US$2.73 1/2.

 

Ethanol futures ended unchanged to higher in very thin trade. The December contract settled unchanged at US$2.12 cents per gallon. The January contract did not trade and rose 4 cents to US$2.07.

 

On Thursday, the U.S. Department of Agriculture is scheduled to release the weekly export sales report for the week ending Nov. 9. Analysts expect sales between 900,000 and 1.2 million metric tonnes. Last week sales totaled 1.929 million tonnes.