February 8, 2007

 

CBOT Corn Review on Wednesday: Ends lower on technically inspired sales

 

 

Chicago Board of Trade corn futures ended lower Wednesday, stumbling near 1-month lows on technically inspired selling amid the absence of fresh supportive news.

 

March corn ended 4 1/4 cents lower at US$3.92 1/4 per bushel, and December finished 1/2 cent lower at US$3.91.

 

The markets continued their grinding consolidation theme, unable to support buying ideas on the lack of fresh news to underpin prices, analysts said. Once the supportive news becomes old, the market gets to a saturation point where upside price objectives have been temporarily accomplished, an analyst added.

 

The market was able to satisfy a near-term technical objective of penetrating support at the bottom of a month-long trading range. The dip below US$3.95 basis March futures uncovered pre-placed sell orders, with locals pressing prices and fund rolling of positions aiding the defensive theme, a trader said.

 

Otherwise, futures had few features to direct prices, with traders also seen evening up positions ahead of Friday's supply and demand report. Looking forward, traders expect a choppy theme to continue to play out, with prices grinding lower in the absence of fresh news.

 

However, they say overall market sentiment remains bullish and downside potential will remain limited.

 

Analysts anticipate U.S. Department of Agriculture will make only minor, if any, adjustments in its supply/demand report, according to industry participants surveyed by Dow Jones. The USDA's report is scheduled for release at 8:30 a.m. EST (1330 GMT) Friday.

 

The average of analysts estimates surveyed by Dow Jones Newswires expects U.S. ending stocks to come in 10 million bushels higher than the previous month at 762 million bushels. The range of analysts' estimates span from 702 million to 852 million bushels.

 

On tap Thursday, USDA is scheduled to release its weekly export sales report at 8:30 a.m. EST. Analysts anticipate export commitments in a range of 700,000 to 1 million metric tonnes.

 

In pit trades, JP Morgan and Iowa Grain each bought 500 March, and Man Financial bought 300 December. FCStonnee sold 700 December, JP Morgan sold 900 December, Calyon Financial sold 300 March, Iowa Grain sold 400 December, and Man Financial sold 300 March. Speculative fund selling was estimated near 4,000 contracts.

 

Day session volume on the e-CBOT platform was 174,009 contracts.

 

CBOT oat futures ended lower Wednesday, succumbing to commission house selling.

 

However, the market continued its recent trend, with commission houses liquidating March positions and buying new-crop futures.

 

In contrast, commercials continue to buy back March positions while commercial hedging stems the tide of fund buying in the new-crop December futures, traders said.

 

March oats closed 4 cents lower at US$2.50 per bushel and December ended 1/4 cent lower at US$2.49 1/4.

 

Ethanol futures ended steady to higher, with the March contract settling unchanged at US$2.055, and the April contract settling 0.005 higher at US$2.010.