January 27, 2007

 

CBOT Corn Review on Friday: Consolidates lower; lacked fresh inputs

 

 

Chicago Board of Trade corn futures ended modestly lower Friday, consolidating in a range amid the absence of fresh market moving news, analysts said.

 

March corn ended 1 1/2-cent lower at US$4.05 1/2 cents per bushel, and December finished 3/4-ent lower at US$3.98 1/2.

 

The market has seemingly reached equilibrium levels in the wake of the recent spike higher moves following the January crop report, said Bill Nelson associate vice president A.G. Edwards and Sons in St. Louis.

 

Overall activity was subdued with futures content to trade sideways, with some participants squaring positions at weeks end. The market is gauging if higher prices are hurting demand, but with Thursday¡¯s export sales report showing nearly 1,000,000 metric tonnes were sold, export demand has not taken a hit, Nelson said.

 

Meanwhile, bullish long range fundamentals, and a jump in energy prices provided some underpinning support to limit downside pressure. Technical activity was a featured attraction with the inability of the nearby March future to challenge the US$4.00 level keeping bullish enthusiasm flowing once again, traders added.

 

Adding some pressure to the market was the CBOT¡¯s raising of margins, forcing some weaker longs to exit some positions, traders said.

 

Meanwhile, the DTN Meteorlogix Weather Service forecast said Argentina¡¯s central crop belt will receive as much as three-quarters of an inch are in store for the weekend. During next week, hotter and drier weather will move into the primary corn and soybean areas, and will produce some heat-related stress. Temperatures will reach into the range of 95-99 Fahrenheit for daytime highs. In other news, Argentina will produce a record 21.5 million metric tonnes of corn from the 2006-07 crop, the Buenos Aires Cereals Exchange said in its weekly crop report Friday.

 

In pit trades, Citigroup bought 2,500 September and 500 December, Tenco bought 700 December and UBS Securities bought 400 December. Sellers were widely scattered among various commission houses.

 

Day session volume on the e-CBOT platform was 95,447 contracts.

 

CBOT oat futures ended mixed, with nearby futures lower and new crop futures edging higher. The rolling of nearby positions benefited deferred months, with speculative buying helping December futures while end the week positioning spillover pressure from other grains weighed on old crop contracts, traders said. March oats closed 3 1/2 cents lower at US$2.62 1/4 per bushel and December ended 1 1/2 cents higher at US$2.49 1/2.

 

Ethanol futures ended mixed, with the February contract settling unchanged at US$1.94, and the March contract settled 0.005 higher at US$1.90.