January 6, 2007

 

CBOT Corn Review on Friday: Settles higher on position squaring

 

 

Chicago Board of Trade corn futures finished higher Friday, making new session highs on the close as position squaring and short covering underpinned prices after two days of sharp losses, sources said.

 

March corn settled 6 cents higher at US$3.68 1/4 per bushel and May corn also rose cents to 3.77 3/4. E-CBOT day-session volume in March was 64,114 contracts.

 

Trading was two-sided for much of the session, with technical weakness weighing on prices early, sources said.

 

However, the market was unable to trade below US$3.59 in March on daily open auction charts and traded on either side of unchanged for much of the session in choppy activity, sources added.

 

Selling interest dried up in early afternoon trade as market participants covered their positions ahead of the weekend and next week's U.S. Department of Agriculture reports, sources said.

 

Corn has had a pretty serious setback but it's a bit overdone, said Bill Nelson, associate vice president at AG Edwards & Sons in St. Louis. The market has a pretty big report out next week and the last few reports have been surprises to the upside, he added.

 

Export sales were termed disappointing by floor sources after the USDA reported that weekly corn export sales were a combined 538,100 metric tonnes for the week ended Dec. 28, well below the 700,000-1.0 million tonnes forecast by analysts.

 

A floor trader said the number was poor but noted that sales are usually light during a holiday week.

 

Sharply lower precious metals prices had little impact in corn as recent selling was "exhausted" and the market due for an up day, a commission house analyst noted.

 

On open auction technical charts, March corn finished below its 50-day moving average but settled above support levels near US$3.60.

 

Buyers Friday included UBS, which bought 1,000 December; Man Financial, which bought 1,100 December; and Fimat, which bought 400 March.

 

ADM Investor Services sold 500 December, Rand Financial sold 1,000 December, Man Financial sold 600 March and Tenco sold 500 March.

 

In options trading, Advantage bought 10,000 February US$3.60 puts and sold 5,000 February US$3.80 puts. Man Financial bought 3,000 March US$3.80 calls.

 

Oat futures settled slightly higher in two-sided trade as light fund selling in the nearby contracts was offset by commercial related buying, floor sources said. The funds sold March with the commercials buying the March-May spread, a floor trader said.

 

March oats settled 1/2 cent higher at US$2.61 3/4 per bushel and May gained 1 cent to US$2.69 1/2.

 

Ethanol futures ended lower in thin activity. The February contract declined 10 cents to US$2.26 per gallon and the March contract, which did not trade, fell 12.5 cents to US$2.075.

 

On Friday, the Commodity Futures Trading Commission is scheduled to release the commitment of traders data for the period ending Jan. 2.