February 27, 2008

 

CBOT Corn Review on Tuesday: Lower; profit-taking from prior gains

 

 

Chicago Board of Trade corn futures ended lower Tuesday, setting back from Monday's run to new all-time highs on profit-taking pressure.

 

March corn ended 2 3/4 cents lower at US$5.30 1/2, May corn settled 3 cents lower at US$5.44 and December finished 3/4 cent lower at US$5.56 1/2.

 

It was a classic turnaround Tuesday for corn, with traders booking some profits after logging in some hefty gains in previous sessions, said Tim Hannagan, analyst with Alaron Trading in Chicago.

 

The market failed to follow the rebound that other commodities experienced Tuesday, as traders exercised caution, with end-of-the-month positioning and nervousness attached to prices at contract highs, limiting advances, analysts added.

 

Buyers were seemingly reluctant to push prices in the absence of fresh fundamental news, traders said. The corn market does not have a tight supply situation to attract chaotic buying on price breaks, so without new demand drivers, the market does not bounce as quickly as soybeans and wheat on price setbacks, said Darrin Newsom, senior analyst with DTN.

 

Nevertheless, supportive underlying fundamentals did not allow for much of a price correction, with broad-based strength in commodities, particularly limit-up wheat futures, allowing futures to trim declines in late action, traders said.

 

The end of the month is approaching and with some key stock and planting reports on tap for feed grains in March, sellers and buyers were reluctant to aggressively push the market, Hannagan added.

 

The DTN Meteorlogix weather forecast said crop weather in central Argentina features warm temperatures and periodic showers over the next week. This blend of periodic thundershower activity and only brief hot spells likely means mostly favorable conditions for filling crops.

 

In demand news, the U.S. Department of Agriculture announced Tuesday private export sales of 110,000 metric tonnes of corn for delivery to South Korea in the 2007-08 marketing year.

 

In pit trades, buyers and sellers were scattered among various commission houses, with speculative fund selling estimated at 5,000 lots.

 

March oats closed firmer amid spillover support from a rally in wheat, a floor trader said. March oats closed 13 1/4 cents higher at US$4.17 1/4 per bushel, and May ended up 15 cents at US$4.30.

 

Ethanol futures stumbled. March ethanol fell 2.5 cents to US$2.32 per gallon, and May finished down 4.5 cents at US$2.27.