December 7, 2007

 

CBOT Corn Review on Thursday: Up modestly as strong energy prices support

 

 

Chicago Board of Trade corn futures settled modestly higher Thursday, bouncing back from early weakness to settle with small gains.

 

March corn settled 3/4 cent higher at US$4.12 per bushel.

 

Light consolidation selling weighed on the market early, but corn began to firm on the sharp rally in energy prices, an analyst said. "As crude oil prices rallied corn began to recover, said Mike Zuzolo, chief analyst at Risk Management Commodities in Lafayette, Ind. Nearby crude oil settled at US$90.33, up US$2.84 per barrel.

 

Good gains posted in wheat futures also provided a floor for prices, Zuzolo said. MGE Dec spring wheat futures rallied 25 cents to US$10.13 per bushel, setting another new all-time high.

 

Corn was also underpinned by weekly corn export sales, said Bob Anderson, an analyst at Commodity Services in Des Moines, Iowa. Despite coming in below expectations, sales were still at a strong level, said Anderson.

 

The U.S. Department of Agriculture reported that weekly export sales were 1.059 million metric tonnes for the week ended Nov. 29, below the 1.1-1.5 million tonnes expected by analysts.

 

Light technical buying was also a supportive factor, a floor trader said.

 

On daily technical charts, electronically traded March remained above its major moving averages.

 

Price direction on Friday will depend on what the outside markets do and any fresh news overnight, the floor trader said.

 

In options trading, Tenco bought 2,000 March US$4.10 calls and sold 2,000 May US$4.30 calls.

 

Oat futures ended unchanged to slightly lower despite a supportive oat production estimate from Statistics Canada, an analyst said.

 

Statistics Canada reported that 2007-08 oat production was 4.69 million metric tonnes, below the 4.90-to-5.20 million tonnes expected by analysts. Despite the estimate, current oat carry over stocks are adequate, an analyst said.

 

March oats settled 1/4 cent lower at US$2.79 per bushel.

 

Ethanol futures settled slightly higher. January ethanol settled up .009 cents at US$1.879 per gallon and February ended .005 cent higher at US$1.825.