January 23, 2007

 

CBOT Corn Review on Monday: Ends mixed, new/old crop months diverge

 

 

Chicago Board of Trade corn futures ended mixed Monday, with old and new crop months diverging over price direction.

 

March corn ended 2 1/2 cents higher at US$4.04 1/4 cents per bushel, and December finished 5 3/4 cents higher at US$3.98 1/2.

 

The market encountered speculative liquidation and commercial selling in nearby contracts, with new crop futures supported by long-term demand prospects and the need to propel prices to levels that will acquire necessary acres in 2007, said Jack Scoville, analyst with the Price Futures Group in Chicago.

 

Technical weakness, talk of overdone conditions coupled with selling ahead of President George W. Bush's potential remarks on energy and biofuels in Tuesday's U.S. State of the Union address encouraged traders to take some profits, analysts said.

 

However, the ability of nearby corn futures to hold support above the US$4.00 level and fresh buying emerging once the March future slipped into a chart gap from last week was pretty positive in the face of chart weakness and an absence of fresh supportive news to feed market bulls, Scoville added.

 

Meanwhile, U.S. corn inspected for export in the week ended Jan. 18 totaled 40.582 million bushels, the USDA reported Monday. The inspections are a 9.3% improvement over the previous week's 37.134 million bushels. Pre-released trade estimated from analysts surveyed by Dow Jones Newswires called for inspections in the range of 35 million to 40 million bushels. Accumulated corn inspections for the 2006-07 marketing year total 838.047 million bushels, up 18.7% from the 705.820 million bushels reported at the same time last year.

 

The DTN Meteorlogix Weather Service forecasts said South America's crop areas have few major weather problems to start out this week. Argentina's central crop belt had some showers over the weekend, which helped to bring an end to a late-week heat wave in the country.

 

In pit trades, Citigroup bought 300 March, Fimat bought 300 March and 300 December. JP Morgan sold 900 December, Fimat and Man Financial each sold 400 July, Rand Financial and UBS Securities each sold 500 December and RJ O'Brien sold 700 March. Speculative funds were estimated sellers of 2,500 contracts.

 

CBOT oat futures ended lower across the board, pressured by speculative sales amid technical weakness and spillover from neighboring grain futures, sources said. March oats closed 2 1/4 cents lower at US$2.67 per bushel and May ended down 3/4-cent at US$2.74.

 

Ethanol futures ended mixed. The February contract settled 0.009 lower at US$1.87.