November 27, 2007

 

CBOT Corn Review on Monday: Lower on light speculative selling, profit-taking

 

 

Chicago Board of Trade corn futures finished lower Monday, unable to hold on to light gains set on the open as speculative selling and a move to lower levels in soybeans weighed on the market, an analyst said.

 

March corn declined 2 1/2 cents to US$4.03 1/4 per bushel.

 

"Basically, corn was a follower of the early weakness in soybeans and wheat," said Terry Reilly, an analyst at Citigroup Global Markets. Although soybeans retraced their losses to trade higher near midday, corn was unable to muster much support as the lack of fresh news limited buying interest, said Reilly.

 

Globally, there are no major weather problems for corn, and export inspections were weaker than expected, adding a bearish tinge to prices, Reilly said.

 

The U.S. Department of Agriculture reported that weekly export inspections were 47.632 million bushels for the week ended Nov. 22, below the 56.597 million inspected last week and the 50 million to 55 million expected by analysts.

 

Losses in nearby wheat futures also limited corn's ability to rally. March wheat fell 11 1/2 cents to US$8.34 per bushel.

 

Current price levels in corn suggest a lot of bullish news already built in to prices, there was no fresh news to trade and the market set back, a trader said.

 

Price direction on Tuesday will depend on what speculative interests want to do as commodities in general look to be a bit "top heavy," an analyst said.

 

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

 

On daily technical charts, electronically traded March traded to its highest level since mid-June and ended above its major moving averages.

 

In options trading, Alaron bought 500 January US$3.80 puts and sold 500 January US$3.90 puts.

 

Oat futures settled at slightly lower levels as spread activity was the feature, a trader said. Commercial interests bought the December-March spread and speculators sold it, the trader said.

 

March oats declined 1 1/2 cents to US$2.86 1/2 per bushel.

 

Ethanol futures settled higher. December ethanol rose 5 cents to US$1.95 per gallon and January gained 2.1 cents to US$1.876.

 

The Commodity Futures Trading Commission weekly commitments of traders report for the period ended Nov. 20 is due to be released Monday afternoon, delayed by the Thanksgiving holiday.