August 12, 2008


CBOT Corn Review on Monday: Falls slightly; prereport positioning



Chicago Board of Trade corn futures creeped slightly lower Monday, as caution and positioning ahead of the government's crop-production report made for a quiet market, analysts said.


September corn ended down 1 1/4 cents to US$4.97 1/4 per bushel, December corn was down 1 1/4 cents to US$5.17 and March corn ended down 1 1/4 cents to US$5.36 3/4.


After plunging in recent weeks, the market is struggling to find any friendly news that could boost prices and encourage more buying, said Jerry Gidel, analyst for North America Risk Management Services. Prices were slightly higher for most of the session but lost their modest gains late in the day.


There was little fundamental news for the market, traders and analysts said.


"It's basically just very quiet out there," an analyst said.


Traders were evening positions ahead of the U.S. Department of Agriculture's crop production and supply and demand reports, which are due to be released Tuesday at 8:30 a.m. EDT. Analysts expect the government will increase total production and yield estimates.


Weather remains bearish, analysts said. However, continued average or below-average temperatures are starting to raise some concern about whether the crop will have enough growing degree days before the onset of autumn.


Prices have dropped nearly US$3 since peaking in late June on flood concerns, as the market has continuously broke through perceived technical support.


"In certain ways, I've lost my enthusiasm for picking a bottom," Gidel said.


Export inspections were reported at 35.824 million bushels for the week Aug. 7, up from 32.111 million bushels the previous week but down from 44,861 million bushels for the same week a year ago.


The government's announcement Friday that U.S. private exporters sold 120,000 metric tonnes of corn for delivery to Egypt in the 2007-08 marketing year was supportive for the market, Gidel said.


CBOT oats futures settled virtually unchanged. September oats were flat at US$3.56 per bushel, December oats ended up 1/4 cent to US$3.75 1/2 and March oats ended flat at US$3.94 1/2. A trader said the slow activity was "just kind of the calm before the report tomorrow."


Ethanol futures ended higher. September ethanol closed up US$0.023 to US$2.063 per gallon and December ethanol closed up US$0.021 to US$2.046.


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