November 17, 2006

 

CBOT Corn Review on Thursday: Settles lower; market consolidates

 

 

Chicago Board of Trade corn futures settled lower Thursday as early price strength secured by speculative-led buying faded and the market consolidated, sources said.

 

December corn settled 6 3/4 cents lower at US$3.51 1/2 cents per bushel and March fell 6 1/2 cents to US$3.66. e-CBOT day session volume in December was 71,803 contracts.

 

"The market ran up to the day's highs at the opening but were unable to extend those gains. That was a signal that there was not enough buying interest to establish new contract highs at this point," said Shawn McCambridge, senior grains analyst with Prudential Financial.

 

There is nothing new fundamentally to support the market and corn attracted some profit-taking. It's beginning to look as if it will trade in a range-bound pattern until something happens on the speculative side of the market, he added.

 

Futures extended losses near the close as sharply lower wheat prices and a sell-off in crude oil prices added to the declines, floor sources added.

 

Weekly export sales were above analyst expectations and provided some support. Several floor traders noted that high prices have yet to dent foreign demand for U.S. corn exports.

 

The USDA reported weekly sales of 1.396 million metric tonnes, above the 900,000-1.2 million tonnes expected.

 

On daily open auction technical charts, December settled above its 10-day moving average. December's 14-day Relative Strength Index stands at 64.42.

 

Buyers Thursday included FC Stonnee, which bought 500 December 2007; Man Financial, which bought 400 December and 200 March; and Fimat, which bought 400 December and 200 March.

 

Citigroup sold 800 March; JP Morgan sold 700 March and 400 December; Man Financial sold 500 March; and UBS sold 400 March.

 

Overall commodity fund selling was estimated at 1,500 contracts.

 

In options trading, RJ O'Brien bought 1,000 July US$3.80 calls, sold 1,000 US$4.40 July calls and sold 1,000 July US$3.40 puts.

 

Oat futures settled moderately lower in active trade as spillover weakness from corn and wheat pressured prices, floor sources said.

 

"There's not really a bull story in oats, so when corn and wheat decline, oats follow," a floor analyst said. Spread trading was active as traders rolled out of their December positions into March.

 

December oats declined 10 3/4 cents to US$2.51 1/2 per bushel and March fell 9 1/2 cents to US$2.64.

 

Ethanol futures ended unchanged to lower. The December contract did not trade and settled unchanged at US$2.12 per gallon. The January contract also did not trade and slipped 1 cent to US$2.06.