February 11, 2006

 

CBOT Corn Review on Friday: Ends weak following wheat; funds quiet

 

 

Corn futures on the Chicago Board of Trade ended lower Friday on light speculative sales, the absence of new fund buying interest and losses in neighboring wheat futures, brokers say.

 

Spreads were noted of the fourth day of the Goldman roll ahead of the Feb. 28 first notice day for CBOT March corn futures, while corn options trade was active.

 

CBOT March corn ended 4 1/4 cents lower at US$2.21 1/4 per bushel, May closed down 4 1/2 cents at US$2.31 3/4, and July settled 4 1/4 cents lower at US$2.40 1/2.

 

Friday's CBOT corn losses followed the U.S. Department of Agriculture's projection Thursday that 2005-06 U.S. corn ending stocks would total 2.401 million bushels, above the average trade estimate of 2.384 billion, and 287 million bushels larger than the previous year.

 

Still, the decrease in the carryout was 25 million bushels lower than USDA's January estimate. The drop was attributed to a 25-million-bushel increase in corn used for ethanol. Corn usage specifically for ethanol is expected to reach 1.6 billion bushels, up from the 1.575 billion bushels predicted a month ago.

 

Midday U.S. Gulf corn basis bids were unchanged while news of an export sale of 116,000 metric tonnes of U.S. corn to unknown destinations had little impact on Friday's CBOT corn prices, brokers said.

 

In Friday's CBOT corn pit trades, JP Morgan bought 1,000 March, Calyon Financial and Citigroup each bought 1,000 May and UBS bought 1,500 May, brokers said. O'Connor and Co. spread 1,000 May/March.

 

In corn options trade, FC Stonnee sold 2,000 July US$2.10 corn put options, sold 2,000 July US$2.20 put options and sold 1,000 May US$2.20 puts. The Refco division of Man Financial bought 2,000 March US$2.30 calls and sold 2,000 March US$2.15 puts, brokers said.

 

Ethanol futures ended firm Friday, with the March future settling up 11 cents at US$2.73 per gallon.

 

Oat futures ended lower. CBOT March oat futures settled 1 1/2 cents lower at US$1.91 1/2 and May oats ended 1 cent lower at US$1.91 per bushel.