August 30, 2008

 

CBOT Corn Review on Friday: Dips slightly on end-of-month selling

 

 

End-of-month selling and a retreat in crude oil sent Chicago Board of Trade corn futures to a slightly lower close Friday, traders said.

 

September corn ended down 1 3/4 cents to US$5.68 per bushel, December corn ended down 2 3/4 cents to US$5.85, and March corn ended down 2 3/4 cents to US$6.04.

 

Prices were higher for much of the day due to short-covering and higher crude. But corn and other commodities retreated when crude relinquished its gains on the way to a slightly lower close, traders said.

 

Late selling was "month-end oriented and not tied to any specific input," a trader said. Spread trading continued to be a dominant feature of the market, he added.

 

Market participants were cautious headed into a long, uncertain weekend, traders said. Although Tropical Storm Gustav has stoked fears of damage to the U.S. Gulf coast's oil infrastructure as well as grain facilities, its path remains uncertain.

 

An analyst said traders decided late in the day that with so much uncertainty headed into the weekend there was more risk on the upside than the downside.

 

The storm could boost prices if it causes a lot of damage along the coast, disrupting oil production and grains business, traders said. But it could also dump healthy amounts of rain on the U.S. corn belt, which would be bearish, they added.

 

Corn's failure to break above US$6 was technically bearish, an analyst added.

 

Deliveries against the September contract totaled 203 lots, which traders said was light but not a significant factor in the market Friday. Expectations had ranged from 300 to 1,500 contracts.

 

Prices were up more than 10 cents earlier in the day amid short-covering, following a week of losses. December had closed at US$6.06 1/2 last week.

 

The CBOT will be closed Monday for Labor Day.

 

CBOT oats futures rebounded slightly Friday. September oats were up 3 1/4 cents to US$3.45 1/4, December oats were up 2 1/4 cents to US$3.62 1/4 and March oats were up 2 1/4 cents to US$3.80 1/4.

 

Ethanol futures were higher. September ethanol ended up US$0.064 to US$2.370 per gallon and December ethanol ended up US$0.014 to US$2.294.