February 13, 2007

 

CBOT Corn Review on Monday: Lower on speculative sales; lacks fresh support

 

 

Chicago Board of Trade corn futures ended lower Monday, pressured by speculative selling amid the absence of fresh news to support higher price action.

 

March corn ended 1 1/2-cent lower at US$4.04 3/4 per bushel, and December finished 3/4-cent lower at US$3.98 1/2.

 

The market lacked supportive influences to inspire buyers to underpin prices, with weakness in outside markets helping promote the defensive theme, analysts say.

 

Futures inability to challenge resistance at Friday's highs encouraged local and speculative selling, as traders quickly discounted the bullish technical considerations of Friday's strong close.

 

The exhaustion of buying interest and the influence of stumbling crude oil and metals futures kept prices under pressure, as the market remains entrenched in a trading range, awaiting fresh directives, analysts said.

 

Meanwhile, U.S. corn inspected for export in the week ended Feb. 8 totaled 37.727 million bushels, the USDA reported Monday. The inspections are a 13.5% increase from the previous week's 33.248 million bushels. Pre-released trade estimates from analysts surveyed by Dow Jones called for inspections in the range of 34 million to 41 million bushels. Accumulated corn inspections for the 2006-07 marketing year total 949.165 million bushels, up 17% from the 811.289 million bushels reported at the same time last year.

 

The DTN Meteorlogix Weather Forecast said snowfall of moderate to locally heavy amounts will extend from the Northern Plains south and east through the Midwest in the next three days. Heavy snow, from 6 to 12 inches, will target south-central Illinois through western Ohio. The widespread snow will snarl transportation for livestock and grain. In the eastern Midwest, heavy snow will further compound a difficult river transportation season on the Illinois and Ohio systems.

 

In pit trades, JP Morgan bought 500 December, Tenco bought 400 May and 500 July, UBS Securities bought 600 March, and Man Financial bought 300 March.

 

Speculative fund selling was estimated between 1,000 and 2,000 contracts. Calyon Financial sold 500 December, JP Morgan sold 300 March, RJ O'Brien sold 300 March, and UBS Securities sold 300 December.

 

Day session volume on the e-CBOT platform was 114,303 contracts.

 

CBOT oat futures ended mixed, with old contracts down on speculative liquidation and the new crop December future up on fund buying and spread rolling. March oats closed 5 1/4 cents lower at US$2.45 1/4 per bushel and December ended 1-cent higher at US$2.53.

 

Ethanol futures ended lower, with the March contract settling 0.030 lower at US$2.025, and the April contract settling 0.030 lower at US$1.990.