February 9, 2006

 

CBOT Corn Review on Wednesday: Recoups Tuesday's losses on spec buying

 

 

Corn futures on the Chicago Board of Trade ended higher across the board Wednesday, recouping most of Tuesday's late declines on speculative led buying.

 

CBOT March corn finished 3 1/4 cents higher at US$2.21 1/4, and May ended 3 1/2 cents higher at US$2.32 per bushel.

 

The market was in recovery mode, as the absence of pressure from outside markets and spillover strength from wheat gave buyers confidence to buy the market, traders said.

 

The supportive theme took control of the market after the open, as the lack of follow through selling that was expected from Tuesday's late slide attracted buying to set the tonnee for the rest of the day.

 

Speculative buying was a featured attraction amid the absence of fresh fundamental influences, as traders remained fearful of the buying strength of the funds, particularly with outside markets making a recovery, analysts said.

 

Aside from fund activity, the market had little influences with advances more a result of a lack of selling than any bullish factors. Active spreading continued as traders rolled positions out of nearby futures ahead of first notice day. Trade positioning in front of Thursday's crop report was a featured ingredient as well, pit traders said.

 

Nevertheless, corn ended off its highs, as diminished fund buying down the stretch enabled local selling to trim advances heading into the close.

 

On tap for Thursday, U.S. Department of Agriculture is scheduled to release its monthly supply and demand report 7:30 CST (1330 GMT). The average of analyst estimates peg corn ending stocks at 2.384 billion bushels from a range of 2.298 billion to 2.426 billion bushels. Analysts anticipate the government will show higher exports, ethanol usage and feed demand in the report.

 

USDA will also release its weekly export sales report for the week ended Feb. 2. Analysts surveyed by Dow Jones anticipate commitments in a range of 800,000 to 1.2 million metric tonnes.

 

In pit trades, ABN Amro, Calyon Financial, JP Morgan, Citigroup, Fimat, Man Financial, O'Connor, and UBS Securities were featured buyers on the day. Sellers were scattered among various firms. Commodity fund buying was estimated near 15,000 contracts.

 

Ethanol futures ended higher across the board, with the March future settling 6 cents higher at US$2.60 per gallon.

 

Oat futures ended on firm footing, rebounding from earlier declines that produced 3-week lows. CBOT March oat futures settled 2 3/4 cents higher at US$1.91 1/2 and May oats ended 1 1/2 cents higher at US$1.90 1/2 per bushel.