February 2, 2006

 

CBOT Corn Review on Wednesday: Down on funds absence, soy weakness

 

 

Corn futures traded at the Chicago Board of Trade ended modestly lower Wednesday, but above lows set earlier in the session as spillover weakness from soybeans and the lack of significant fund buying as compared to recent sessions weighed on corn futures, traders said.

 

March corn settled 2 1/4 cents lower at US$2.16 1/2 per bushel, May corn fell 2 1/2 cents to US$2.26 1/2 and July declined 2 cents to US$2.36.

 

"It looks like the fund run is over," said Steve Bruce, a floor broker with Man Financial. Recent inflows of fund money have supported prices and without the money coming in everyday, the market is going down, he said. In addition, the way the spreads are trading suggests there are no problems for corn, he said.

 

Commodity fund buying was estimated at 6,500 contracts Wednesday, well below recent amounts.

 

There was enough fund interest today to protect their positions, said Shawn McCambridge, senior analyst with Prudential Financial. However, ideas that corn is overbought and spillover weakness from soybeans helped to erode prices, he added.

 

Commodity fund buying was estimated at 5,800 contracts on Wednesday.

 

Soybean futures ended the session with double digit losses as scattered rainfall overnight in Argentina and forecasts for possible additional precipitation through the weekend pushed futures lower. March soybeans declined 14 3/4 cents to US$5.79 1/2.

 

Rain is forecast over the next several days in Argentina's crop producing regions after rain fell overnight, DTN Meteorlogix weather said. The rainfall is timely for the late season development of soybeans with temperatures receding from very warm levels to normal to below normal over the next five days, Meteorlogix said.

 

News from the U.S. Department of Agriculture that Japan had purchased 150,000 metric tonnes of U.S. corn was viewed as routine and had little impact.

 

Buyers on Wednesday included UBS, which bought 6,000 March, R.J. O'Brien bought 1,200 March, ABN Amro bought 500 March and 100 July, Fimat bought 300 March, 500 May and 100 December, and Goldenberg-Hehmeyer bought 300 March.

 

Sellers Wednesday included Calyon Financial, which sold 800 March, Fimat sold 300 March, ADM sold 200 March, JP Morgan sold 200 March and the Refco division of Man Financial sold 400 March.

 

In spread trading, May-March traded over 8,000 contracts.

 

Oat futures finished mostly lower, however the March future settled unchanged at US$1.92 per bushel

 

Ethanol futures settled higher with the most-active March contract up 6 cents at US$2.47 per gallon.

 

Thursday, the U.S. Department of Agriculture is scheduled to release the weekly export sales report at 7:30 a.m. Sales estimates range from 1.0 million metric tonnes to 1.3 million tonnes for the week ended Jan. 26. Sales for the week ended Jan. 19 totaled 2.165 million metric tonnes.