December 12, 2006

 

CBOT Corn Review on Monday: Shrugs off early losses, ends higher

 

 

Chicago Board of Trade corn futures finished with modest gains Monday, bouncing back from early losses after the release of the U.S. Department of Agriculture's supply and demand report as spillover support from soybeans and soymeal helped corn futures recover, sources said.

 

December corn ended 1 1/4 cents higher at US$3.55 1/2 per bushel and March rose 2 1/4 cents to US$3.70 3/4. e-CBOT day session volume in March was 54,045 contracts.

 

Before the open, the USDA estimated corn ending stocks at 935 million bushels in December, unchanged from its November forecast and slightly lower than the average analyst estimate of 937 million.

 

World corn ending stocks were revised slightly higher, after the USDA forecast larger corn crops in Argentina and South Africa. World corn stocks were pegged at 92.7 million metric tonnes, 2.7 million above the level estimated in November.

 

"What goes down must come up," a floor-based commission house analyst said.

 

The news from the report was a slight negative, but after the early selling interest was exhausted, participants came in to buy and the rally in the soy complex added support, the analyst noted.

 

January soybeans rose 10 3/4 cents to US$6.66 3/4 per bushel and January soymeal added US$2.20 to US$190.30 per short tonne.

 

The USDA also released the weekly export inspections report with corn inspections at 40.2 million bushels for the week ended Dec. 7, within the 34 million to 47 million bushels expected. The report had little impact, sources said.

 

The corn market was oversold in the short term and due for a bounce, a floor trader added. Trading activity was modest, he noted.

 

On open auction technical charts, March remained within its 20-day and 40-day moving averages for the fourth straight session.

 

Buyers on Monday included Tenco, which bought 500 December 2007; Goldenberg-Hehmeyer, which bought 400 July; and Man Financial, which bought 200 March.

 

JP Morgan sold 400 March and 300 July; Rand Financial sold 300 March; and Iowa Grain sold 300 March.

 

In options trading, Fimat bought 1,000 March US$3.20 puts and sold 2,000 March US$3.30 puts.

 

Oat futures ended with thin gains as the market traded in a "holiday-type atmosphere," a floor source said.

 

Fund buying was noted in the deferred contracts with the nearby months content to follow corn, he added.

 

December oats settled 1/2 cent higher at US$2.52 1/2 per bushel and March gained 1 3/4 cents to US$2.62 1/4.

 

Ethanol futures ended higher in very thin activity. The January contract rose 1.5 cents to US$2.25 per gallon. The February contract did not trade and settled 4 cents higher at US$2.205.