January 19, 2008

 

CBOT Corn Review on Friday: Stumbles lower on speculative profit taking

 

 

Chicago Board of Trade corn futures stumbled lower Friday, setting back on speculative profit taking amid a lack of fresh supportive news to extend the market's uptrend.

 

March corn ended 3 3/4 cents lower at US$4.98 1/4, and December finished 6 cents lower at US$5.15.

 

The exhaustion of speculative buying interest with supportive data from last week's crop report factored into the market attracted profit taking in the absence of new fundamental news to spur buying, said Shawn McCambridge, senior grains analyst with Prudential Bache in Chicago.

 

A modest amount of hedge-related selling, and with the market heading into a period that has a lull in fresh news, took some edge off prices after posting pretty good gains in the past week, analysts said.

 

Without fresh news, prices seem to stagnate, allowing the upside push to run out of steam, and that encouraged nervous longs to take some profits, squeezing some weaker longs from the market, analysts added.

 

Nevertheless, the market continues to possess a bullish outlook with acreage uncertainties expected to linger into the spring, leaving traders to view the setback as more of pause allowing the market to catch its breathe before fresh new surfaces, a CBOT floor analyst said.

 

Private analytical firm Informa Economics on Friday estimated U.S. 2008 corn plantings at 90.048 million acres, traders said. In December, the firm pegged corn plantings at 87.4 million. U.S. corn in 2007 was planted on 93.6 million acres, according to U.S. Department of Agriculture.

 

The DTN Meteorlogix weather forecast said in Argentina's major corn and soybean areas, a few thundershowers are in store in the driest areas of La Pampa and southwest Buenos Aires early next week. However, this is not expected to change the situation significantly as warmer and drier weather returns for the balance of the period. In pit trades, buyers were scattered among various commission houses, with FCStonnee a seller of 800 March and 300 July, Newedge USA LLC selling 400 March and Rosenthal a seller of 300 March. Speculative fund selling was estimated at 4,000 lots.

 

CBOT oat futures finished lower amid spillover pressure from weakness in corn and soybeans, a floor trader says. March oats settled down 2 1/2 cents at US$3.19 1/2 per bushel.

 

Ethanol futures ended higher. February ethanol closed up 2 cents at US$2.24 per gallon, while March closed 2.4 cents higher at US$2.189.