February 22, 2006

 

CBOT Corn Review on Tuesday: Slightly lower; consolidates fri gains

 

 

Corn futures on the Chicago Board of Trade ended fractionally lower Tuesday, consolidating from Friday's gains with concerns over the impact of the spread of bird flu on global feed demand weighing on prices.

 

CBOT March corn finished 1/2 cent lower at US$2.26, and May ended 1/4 cent lower at US$2.37 per bushel.

 

The market was on the defensive throughout the day, as prices scaled back Friday's gains, with the absence of aggressive speculative buying, bird flu worries and spillover weakness from soybeans keeping the edge off prices, analysts said.

 

The market was caught between soybean weakness and wheat strength, with prices quietly hovering in narrow ranges most of the day. Futures were unable to generate any strong downside momentum, as good underlying export and domestic demand kept prices underpinned.

 

New-crop-month futures finished near unchanged, with good buying from JP Morgan in the December future helping promote strength in deferred-month contracts. This was a consistent tonnee through most of the day, with the bulk of the session's volume seen in the spreads. As the session drew to a close, corn managed to climb to the day's highs as commission house buying and late advances in wheat forced locals to cover short positions down the stretch, traders said.

 

The U.S. Department of Agriculture said corn inspected for export in the week ended Feb. 16 totaled 44.582 million bushels. The export figure was up 47.1% from last week's 30.298 million. Analysts expected corn inspections in a range of 31 million to 36 million bushels.

 

Tests confirmed another 22 cases of bird flu on the northern German island of Ruegen, a lab reported Tuesday. Croatia reported a new case of H5N1 in wild fowl Tuesday - the country's second outbreak of the deadly strain of bird flu since October.

 

Meanwhile, international health experts Tuesday expressed concern over the unprecedented spread of bird flu from Asia to Europe and Africa, but said the spotlight is on Indonesia because it is the country with the most human cases.

 

In pit trades, JP Morgan bought 1,300 March and 1,000 December, Fimat and Rand Financial each bought 300 May, O'Connor bought 300 March, Rosenthal bought 500 March and USA Trading bought 700 March. Sellers were scattered among various firms, with Rand Financial a seller of 300 May, Tenco selling 500 May and USA Trading selling 300 March.

 

In spreads, the March/May spread was active again with Fimat spreading 1,500, and ABN Amro, Citigroup and Tenco each spreading 1,000 lots.

 

Ethanol futures ended higher, with the March future settling 2 cents higher at US$2.49 per gallon.

 

Oat futures lower, with the rolling and liquidation of March positions a featured attraction. CBOT March oat futures settled 5 cents lower at US$1.87 and May oats ended 1 1/4 cent lower at US$1.90 1/4 per bushel.