September 14, 2006

 

CBOT Corn Review on Wednesday: Little changed; unable to hold early gains

 

 

Chicago Board of Trade corn futures settled little changed Wednesday as the market was unable to maintain modest advances set earlier in the session, sources said.

 

September corn gained 1/2 cent to US$2.24 cents per bushel, and December ended unchanged at US$2.37 3/4. E-CBOT day session volume in December was 43,148 contracts.

 

Corn had a little corrective bounce following recent losses as the market consolidated, said Vic Lespinasse of AG Edwards & Sons. "By and large Wednesday's trading was a knee-jerk reaction to Tuesday, but it was not an impressive one. This could suggest the market might move lower in the near term," he said. Seasonally the market is weak this time of the year, he added.

 

Spillover weakness from wheat late in the session also added to the poor tonnee, floor traders said. December wheat which traded higher for most of the session, sold off near the close. December wheat declined 5 cents to US$3.97 1/2 per bushels.

 

Modest fund buying helped supply some strength to the market, sources noted. However, options-related selling of the at the money Dec. US$2.40 call tempered buying enthusiasm, a floor analyst said.

 

Advantage Futures sold 5,000 December US$2.40 calls.

 

On technical charts, December remained beneath its 20-day moving average. The 14-day relative strength index in December corn stands at 40.34. A reading below 30 indicates oversold conditions, with a reading above 70 indicating overbought conditions.

 

Buyers Wednesday included FC Stonnee, which bought 500 December; ABN Amro, which bought 400 December; Man Financial, which bought 500 December; and Tenco, which bought 500 December.

 

JP Morgan sold 400 December and 300 March, and Fortis sold 400 December.

 

Commodity fund buying was estimated at 2,500 contracts.

 

Oat futures settled mostly higher in thin trade as light fund buying supported prices, a floor broker said.

 

September oats slipped 1 cent to US$1.88 per bushel while December rose 3 cents to US$1.96 3/4.

 

Ethanol futures ended little changed in thin trade. October ethanol settled unchanged at 1.87 per gallon. November rose .002 cents to US$1.86.

 

Thursday, the USDA is scheduled to release the weekly export sales report for the week ended Sep. 7. Analysts expect corn export sales between 850,000-1.0 million metric tonnes. Sales for the week ended Aug. 31 were 916,000 tonnes.