February 16, 2006

 

CBOT Corn Review on Wednesday: Ends firm on borrowed soy strength

 

 

Chicago Board of Trade corn futures ended firm Wednesday, finishing at session highs as well as a new high for the week on speculative and local buying amid spillover momentum from a late surge of soybean futures.

 

CBOT March corn finished 3 1/4 cents higher at US$2.22, and May ended 3 1/4 cents higher at US$2.32 1/4 per bushel.

 

The influence of the soybean market was a directive force in the market, with that market's ability to stage a reversal from double-digit losses to nearly seven-cent gains at one point sent bullish wave filtering across the trading floor, said a CBOT commission house broker.

 

Corn hovered within narrow trading ranges for most of the day, struggling to find direction amid the absence of fresh fundamental news. Futures initially came under pressure from a lack of fund-related buying that underpinned prices previously coupled with abundant free stocks that are keeping upside momentum in check, traders said.

 

Otherwise, the liquidation of March positions ahead of first notice day and spread rolling were featured attractions. This continued, until the market managed to push firmly into positive territory on borrowed momentum from soybean futures' ability to bounce back from earlier lows. Speculative-led buying served as the catalyst for the recovery in otherwise subdued price action.

 

Meanwhile, the DTN Meteorlogix forecast said mainly dry weather with hot temperatures in the 90s Fahrenheit will extend through the middle of next week in Argentina. Argentina is already hot, with temperatures on Tuesday reaching 100 degrees Fahrenheit in the southern sector of Buenos Aires province. This entire region will see increasing crop stress due to the dry and very warm to hot pattern through the middle of next week.

 

On tap for Thursday, U.S. Department of Agriculture is scheduled to release its weekly export sales report for the week ended Feb. 9. Analysts surveyed by Dow Jones anticipate commitments in a range of 1,000,000 to 1,200,000 metric tonnes.

 

In pit trades, Citigroup, Goldenberg Hehmeyer, Man Financial and Tenco were featured buyers, with JP Morgan, Man Financial, Tenco and ABN Amro key sellers.

 

Ethanol futures ended lower, with the March future settling 7 cents lower at US$2.58 per gallon.

 

Oat futures ended higher across the board, bouncing from earlier lows in unison with the rest of the grain complex at CBOT. CBOT March oat futures settled 3 cents higher at US$1.92 and May oats ended 3 1/4 cents higher at US$1.91 3/4 per bushel.