January 6, 2006

 

CBOT Corn Review on Thursday: Falters on technicals, weak soy

 

 

Corn futures traded at the Chicago Board of Trade finished Thursday with modest losses as technical selling and spillover weakness from the soy complex and wheat weighed on the market, sources said. Light short covering near the close trimmed some of the declines, they added.

 

March corn fell 2 3/4 cents to US$2.15 1/2 per bushel, May corn lost 2 1/4 cents to US$2.24 3/4, and July fell 2 1/2 cents to 2.32 3/4 per bushel.

 

"The market acted tired today," a floor trader said. There was no buying interest from the funds and corn followed soy complex and wheat lower.

 

Technical selling pressured prices with March corn slipping under its 100-day moving average of US$2.15 1/2 at one point during the day, before recovering to finish at that level.

 

Fund and technical selling depressed soybean futures as well, with the March contract falling 13 3/4 cents to US$6.18 1/2 per bushel. March soybean meal dropped US$5.60 lower to US$191.30 per short tonne and March wheat futures slipped 6 1/2 cents to US$3.39 3/4.

 

It was a down day for commodities, a floor analyst said. Precious metals, oil, and natural gas were all lower and the dollar was higher. The whole floor followed the trend, he said.

 

Uncertainty over the near-term weather in Argentina also limited activity, sources said. Although light, scattered rainfall is predicted over the next several days with above normal temperatures for much of the country, forecasters are in disagreement about the 6-10 day weather outlook.

 

Argentina's corn crop is beginning its pollination stage which helps determine the crop's yield.

 

Buyers on Thursday included Cargill, which bought 800 March and 200 July, FC Stonnee bought 500 March, Calyon bought 800 March, Fimat bought 700 March, and Kottke bought 400 March.

 

Sellers Thursday included ABN Amro which sold 1,800 March, Calyon sold 200 March, JP Morgan sold 300 March, Rand Financial sold 500 March, and the Refco division of Man Financial sold 500 March.

 

Commodity fund selling was estimated at 2,500 contracts.

 

Oat futures ended lower on spillover from the rest of the floor sources said. The March contract settled 3 1/4 cents lower at US$1.94 per bushel.

 

Ethanol futures ended mostly higher. The most-active April contract gained 3 cents and settled at US$2.14 per gallon.

 

Friday, the U.S. Department of Agriculture is scheduled to release the weekly export sales report for the week ended Dec. 29 at 7:30 a.m. CST. Analysts expect sales between 450,000-650,000 metric tonnes. Sales for the week of Dec. 22 totaled 360,200 metric tonnes.