January 24, 2006

 

CBOT Corn Review on Monday: Extends modest gains on late buying

 

 

Corn futures traded at the Chicago Board of Trade finished higher Monday as late buying, thought to be technically related, helped lead futures higher, a floor trader said.

 

March corn rose 3 1/4 cents to US$2.08 1/4 per bushel; May corn settled 3 1/4 cents higher to US$2.18 1/4; and July corn ended 3 1/2 cents higher at US$2.27 1/4.

 

Late technical buying helped extend modest gains, but commercial buying in the deferred months provided support for much of the session, a floor analyst said. For most of the day, however, there wasn't much of a feature in corn, he said.

 

On technical charts, March filled a downside gap created early last week and finished just below its 50-day moving average.

 

The market was oversold the past several days so it was ripe for some position squaring, a commission house analyst said. But the market found it hard to move much either way until late in the session, he said.

 

"Today's activity was a 'dead-cat bounce'," said Don Roose, president of US Commodities in West Des Moines, Iowa. Cash movement has pretty much stopped right now as farmers ease off selling their grain. Early buying in soybeans and wheat helped support corn as well, he added.

 

Reports that a Canadian cow tested positive for mad-cow disease, or bovine spongiform encephalopathy, had little effect on the market.

 

News that Informa Economics estimated that acreage planted to corn would decline 2.34 million acres to 79.416 million in 2005-06 had little market impact as well, floor traders said. In 2005, U.S. farmers planted 81.759 million acres of corn.

 

Export inspections at 32.410 million bushels were in line with analysts' expectations of 30 million-35 million and had little market impact.

 

News of a sale of 118,000 metric tonnes of U.S. corn to unknown destinations and a sale of 110,000 tonnes to South Korea for delivery in 2005-06 were termed routine by a floor trader.

 

Buyers on Monday included ADM, which bought 200 March; FC Stonnee bought 400 July; JP Morgan bought 500 March and 300 July; Fimat bought 400 March; O'Connor bought 500 March; the Refco division of Man Financial bought 1,500 March; and Tenco bought 400 March and 800 May.

 

Sellers Monday included Calyon Financial, which sold 3,200 March; Fimat sold 900 March; Man Financial sold 1,000 March; O'Connor sold 500 March; the Refco division of Man Financial sold 500 March; Tenco sold 600 March; and UBS sold 1,500 March.

 

Commodity fund selling was estimated at 3,500 contracts.

 

Oat futures settled mixed with most-active March contract slipping 1 cent to US$1.89 3/4.

 

Ethanol futures finished mostly higher. The April contract did not trade and fell 1/2 cent to US$2.41 1/2 per gallon.