December 8, 2006

 

CBOT Corn Review on Thursday: Higher; consolidates after recent losses

 

 

Chicago Board of Trade corn futures ended higher Thursday as position squaring after recent price weakness and light fund inspired technical buying supported prices in quiet activity, sources said.

 

December corn rose 5 1/2 cents to US$3.58 1/2 per bushel and March gained 6 1/2 cents to US$3.72 1/2. e-CBOT day session volume in March was 60,617 contracts.

 

Corn has been oversold in the short term and once the early selling dried up, the market began to work its way higher, a floor analyst said. Thin fund buying helped kick off light technical buying and some participants consolidated their positions, he added.

 

Before Thursday's gains, March corn had fallen 27 cents from its contract high set last week.

 

The market was due for an up day after the recent losses and corn also drew some support from firm soybean and soymeal prices, a trader said.

 

Weekly export sales had little impact on the market with the U.S. Department of Agriculture reporting sales of 812,700 metric tonnes for the week ended Nov. 30, near the low end of analyst expectations.

 

Next week's supply and demand report is expected to reveal little change in usage and the market will soon begin to start a "holiday type trade" a commission house analyst said.

 

In a survey conducted by Dow Jones Newswires, the average of 14 analysts' estimates peg 2006-07 corn ending stocks at 937 million bushels, slightly above the USDA's November estimate of 935 million.

 

Trading from now until the end of the year is expected to be choppy and begin to taper off as funds begin to shut down their operations ahead of year end, he added.

 

On open auction technical charts, March traded between its 20-day and 40-day moving averages.

 

Buyers Thursday included ABN Amro, which bought 1,000 March, Man Financial, which bought 1,000 March, and JP Morgan, which bought 500 December 2007.

 

FC Stonnee sold 200 March and Tenco sold 200 March.

 

In options trading JP Morgan bought 2,000 December 2007 US$3.90 calls and sold 2,000 December US$3.30 puts. In addition JP Morgan sold 1,000 March US$3.90 calls.

 

Oat futures settled with modest gains as light fund buying of the deferred months helped support prices with the firm tonnee in corn also adding support, a floor source said.

 

December oats settled 3 1/4 cents higher at US$2.54 1/4 per bushel and March rose 1/2 cent to US$2.62.

 

Ethanol futures ended modestly lower. The January contract did not trade and finished down 1/2 cent at US$2.23 1/2 per gallon. The February contract also did not trade and settled .002 cent lower at US$2.195.

 

Friday afternoon the Commodity Futures Trading Commission is scheduled to release the weekly commitment of traders report for the period ending Dec. 5.