January 7, 2006

 

CBOT Corn Review on Friday: Slips on thin news in quiet trade

 

 

Corn futures at the Chicago Board of Trade settled with small-scale losses in light volume Friday as the lack of any significant inputs limited activity, sources said.

 

A visit to the trading floor by U.S. President George W. Bush at mid-morning also limited trading, they added.

 

March corn declined 1 1/2 cents to US$2.14 1/4 per bushel, May corn also slipped 1 1/4 cents to US$2.23 1/2, and July corn lost 1 cent to US$2.31 3/4 cents per bushel.

 

"It was an anti-climatic day," said Vic Lespinasse of AG Edwards & Sons. The market expected the funds to come into the market and they were largely absent Friday in corn, he noted.

 

Market participants have been waiting for commodity index funds to enter the market and support prices, similar to what happened last winter, sources said. Index funds are buy-and-hold funds, unlike commodity trading funds, which tend to be more active.

 

A late decline in wheat futures added to the light losses in the corn pit, a floor broker said. March wheat fell 9 cents to US$3.30 3/4 cents, making two-week lows on local and fund selling, the broker noted.

 

Bush's visit limited activity as traders' attention was focused on the President instead of the market, Lespinasse said.

 

In addition, the floor ignored stronger outside markets for other commodities, breaking the recent pattern of strength across all commodities, he added.

 

On technical charts, March corn finished below both its 10-day and 100-day moving averages.

 

Buyers on Friday included Cargill, which bought 200 March. Fimat bought 2,000 March, the Refco division of Man Financial bought 600 March and 400 July, and R.J. O'Brien bought 200 March.

 

Sellers Friday included Goldenberg-Hehmeyer, which sold 1,000 March. JP Morgan sold 500 March, Rand Financial sold 500 March, the Refco division of Man Financial sold 500 March, FC Stonnee sold 300 March, and UBS sold 300 March.

 

Commodity fund selling was estimated at 1,400 contracts.

 

Oat futures settled lower on spillover weakness from wheat, sources said. The March contract declined 2 3/4 cents to US$1.91 1/4 per bushel.

 

Ethanol futures settled mixed. The most-active April contract did not trade and gained 1/2 cent to US$2.14 1/2 per gallon.

 

On Monday, the U.S. Department of Agriculture is scheduled to release the weekly export inspections report at 10:00 a.m. CST (1600 GMT).