December 14, 2006

 

CBOT Corn Review on Wednesday: Lower; fund, technical selling weigh

 

 

Chicago Board of Trade corn futures settled lower Wednesday but up from session lows in choppy activity.

 

December corn fell 4 1/2 cents to US$3.54 1/2 per bushel and March settled down 4 1/2 cents to US$3.68 1/4. E-CBOT day-session volume in March was 68,320 contracts.

 

Corn sold off early on weaker prices overnight with a short-term negative sentiment weighing on the market as well, a floor trader said.

 

Fund and technical selling added to the losses with early weakness in soybean futures also adding pressure, a floor source said.

 

A move to higher levels in wheat futures and the emergence of light commission house buying near midday helped to trim the declines, but the rally was unable to gain any traction, they added.

 

On open-auction technical charts, March corn gapped open to the downside but filled the gap during the session while remaining stuck in its recent trading range, a commission house analyst said.

 

March corn remains above its 40-day moving average but below its 10-day and 20-day averages.

 

Export sales are due out Thursday and the market could be setting up for a strong number, a commission house analyst said.

 

Analysts estimate weekly corn exports between 700,000-1.5 million metric tonnes for the week ended Dec. 7.

 

Buyers on Wednesday included Iowa Grain, which bought 1,000 March; JP Morgan, which bought 700 March; and FC Stonnee, which bought 200 March.

 

Tenco sold 500 December 2007, Deutsche Bank sold 500 December 2007, JP Morgan sold 800 March and Iowa Grain sold 500 July.

 

Overall fund selling was estimated at 4,000 contracts.

 

In options trading, Rand Financial bought 800 May US$4.00 calls.

 

Oat futures ended mostly lower as spillover weakness from corn weighed on the market despite modest fund buying, a local trader said.

 

Spot month December oats settled 4 cents higher at US$2.60 per bushel while March fell 2 1/4 cents to US$2.63 1/4.

 

Ethanol futures settled slightly lower in thin activity. January ethanol settled .005 cent lower at US$2.24 per gallon. The February contract did not trade and also ended down .005 cent at US$2.19.

 

The U.S. Department of Agriculture is scheduled to release its weekly export sales report at 7:30 a.m. CST for the week ended Dec. 7. Sales for the week ended Nov. 30 were 812,700 metric tonnes.