December 28, 2007

 

CBOT Corn Review on Thursday: Rises slightly into close

 

 

Corn futures rose slightly late in the day-session Thursday at the Chicago Board of Trade, as the inability to take out the day's lows led the market to the path of least resistance.

 

Most-active March corn rose 2 1/2 cents a bushel to settle at US$4.54 3/4.

 

Late in the session corn migrated to the plus side as soybeans trimmed their losses. Corn, though, continued its modest trek upward even as soybeans retreated back to just off session lows in a relatively light volume trade.

 

Corn spent much of the session weaker, but in a fairly tight trading range. Even with the move to new session highs ahead of the closing bell, March corn staged an inside trading day on day-only charts, meaning Thursday's range did not exceed Wednesday high and low prices. March corn matched its contract high of US$4.55 a bushel during the session.

 

The choppy, consolidative trade was not surprising given Wednesday's sharp rally. What did surprise analysts was the fact that corn traded firmer at all, in light of soybean weakness and significant wheat losses.

 

"It was a quiet trade, but the most impressive thing that occurred was the (corn) market has not corrected at all. Yesterday was a big day, straight up, and today we saw wheat down 26 cents and beans down 7 or 8 cents, but corn was unchanged (for much of the session). That tells you something about the resilience of corn," said Jim Smitherman, president, Harvest Trading Group.

 

The rise came as speculators were largely absent Thursday, but the interest in being long corn remains. Although funds were modest net sellers of about 1,000 contracts Thursday, overall they are heavy buyers in corn as they seek to position themselves bullishly in hopes of further gains down the road. In background remains the fight for acres between the row crops for spring planting and corn and soybeans duel for farmer attention.

 

The nearly straight-line rise for grain markets, particularly since this fall, has unnerved many long-time market watchers, who cite caution. "You've gotta be friendly these markets, but you really have to be in control of your risk," Smitherman said, echoing sentiments from other market participants. "Remember how quickly things can change."

 

Standout buyers include JP Morgan and Tenco each buying 200 March and 100 July and Citigroup buying 300 March. R.J. O'Brien was a seller of 200 March.