January 31, 2006

 

CBOT Corn Review on Monday: Modestly lower, early buying wanes

 

 

Corn futures traded at the Chicago Board of Trade settled slightly lower Monday, unable to retain opening level gains built upon spillover from stronger soybean prices and light fund buying, sources said.

 

March corn slipped 1 cent to $2.17 3/4 per bushel, May corn fell 3/4 cent to $2.27 3/4, and July lost 1 cent to $2.36 1/2.

 

Corn jumped higher on the opening bell, making session highs on the opening as spillover support from strong soybean futures helped March pierce technical resistance around the $2.21 level and trade at its highest level since Oct. 3.

 

Concerns over weather conditions in Argentina also provided some support, traders said.

 

The lack of strong fund buying, which helped propel corn futures for much of last week, was not evident in Monday's trade and without it, corn futures slipped from their opening levels to trade in a choppy two-sided pattern for much of the session.

 

"A bull has to be fed everyday and there wasn't much fund buying in corn futures today," a floor trader said.

 

Commodity fund buying in corn was estimated at 2,100 contracts.

 

Corn assumed the role of a follower, and without the fund buying, there isn't much of a reason to go higher, a commission house broker said.

 

On technical charts, March corn moved through resistance at $2.21 on the opening but was unable to test $2.25. March held support at $2.16 3/4, which was Friday's day session low.

 

Above-average temperatures and little precipitation were seen over the weekend in Argentina, with widely scattered rainfall expected through Wednesday, DTN Meteorlogix weather said.

 

Export inspections were released during the session by the U.S. Department of Agriculture and were 36.135 million bushels above the 28 million to 34 million expected by analysts.

 

Buyers on Monday included ABN Amro, which bought 2,000 March, Calyon Financial bought 1,000 March, JP Morgan bought 500 March, Fimat bought 800 March and 500 May, Prudential bought 500 March and the Refco division of Man Financial bought 1,500 March.

 

Sellers Monday included Cargill, which sold 1,000 May and 500 March, ABN Amro sold 400 March, Calyon Financial sold 500 March, Fimat sold 1,500 March, Citigroup sold 500 March and 300 May, the Refco division of Man Financial sold 1,000 March and UBS sold 400 March.

 

Oat futures finished modestly higher, as the market followed soybeans and wheat higher, a floor trader said. Light fund buying provided support with commercial hedging limiting the fund influence, he added. The March contract settled 2 1/4 cents higher at $1.93 per bushel.

 

Ethanol futures settled mostly higher with the most-active April contract unchanged at $2.41 per gallon.