December 19, 2007

 

CBOT Corn Review on Tuesday: Settles lower as profit-taking weighs

 

 

Chicago Board of Trade corn futures settled lower and near session lows Tuesday as profit-taking kept prices on the defensive for most of the session, analysts said.

 

March corn settled 6 3/4 cents lower at US$4.32 per bushel.

 

The profit-taking that began late in Monday's trade continued into Tuesday's session, said Vic Lespinasse, an analyst with Illinois Grain. However, "given the scope of corn's price gains in recent weeks, the losses were modest," Lespinasse said.

 

March corn has rallied more than 40 cents per bushel since late November and had settled higher in the previous nine trading days.

 

The absence of fresh bullish news also added to the downward pressure, with a reversal from early sharp gains in crude oil adding to the lack of buying interest, a trader said.

 

This is the last full week of the calendar year, and the market was under pressure as some people liquidated their long positions before the end of the month and the year, the trader added.

 

Speculative selling also contributed to the weakness, with commodity fund selling estimated at 4,000 contracts in open auction trading.

 

Price direction Wednesday will depend on the level of position-squaring that occurs before the end of the year, a commission house analyst said.

 

On daily technical charts, electronically traded March corn settled at its lowest level in a week but remained above its major moving averages.

 

In options trading, RJ O'Brien bought 500 March US$4.10 puts and sold 1,000 March US$3.80 puts. FC Stonnee bought 500 March US$4.40 calls and sold 500 March US$4.10 puts.

 

Oat futures ended lower as light technical selling kept prices on the defensive for most of the session, a trader said.

 

March oats settled 2 1/4 cents lower at US$2.97 per bushel.

 

Ethanol futures settled higher. January ethanol gained 2.4 cents to US$2.134 per gallon, and February rose 3.5 cents to US$2.095.