February 28, 2006

 

CBOT Corn Review on Monday: Near flat; feeds off wheat spillover

 

 

Chicago Board of Trade corn futures ended near unchanged Monday, staging a modest recovery from earlier losses on local and speculative buying amid spillover strength from other markets and the exhaustion of selling pressure.

 

CBOT March corn finished 1/4 cent lower at US$2.27 1/2, and May ended 1/4 cent higher at US$2.38 3/4 per bushel.

 

The market fed off the momentum of wheat, with light speculative and local buying uncovered as fund buying emerged in wheat and soybeans, analysts said.

 

The market managed to retrace earlier declines, ending near unchanged as the exhaustion of selling pressure enabled futures to find their footing. However, the absence of fresh fundamental support failed to attract aggressive buying, with active contracts unable to press through resistance at Friday's highs.

 

Corn futures initially fell under the weight of fund selling, with the market pressed by consolidative trade, with weakness in inflationary markets and concerns over the spread of bird flu overseas keeping the market in a corrective mode. This was consistent, with spreading and liquidation of March positions ahead of Tuesday's first notice day featured attractions.

 

This continued, until late strength in wheat filtered over to inspire local buyers with speculative interest picking up as well, traders said.

 

Meanwhile, analysts surveyed by Dow Jones Newswires anticipate heavy deliveries against CBOT March corn futures. First notice day for the March future is Tuesday. Wide cash basis levels coinciding with an abundance of available cash corn is seen producing large deliveries against the March contract. Deliveries are expected to fall in a range of 1,200 to upwards of 4,000 lots, with many analysts leaning toward a figure near 2,000 lots.

 

U.S. corn inspected for export in the week ended Feb. 23 totaled 29.790 million bushels, the USDA reported in its weekly export inspections report. The figure is down 35.2% from the prior week and below pre-released estimates calling for inspections in a range of 38 million to 43 million bushels. Accumulated inspections totaled 887.396 million bushels, up 4.6% from the 848.096 million reported at the same point last year.

 

DTN Meteorlogix said rainfall of up to one inch will develop between Monday and Wednesday in Argentina. Additional showers and thundershowers are likely from Thursday into Friday.

 

In pit trades, JP Morgan, Citigroup, Fimat, RJ O'Brien and Rosenthal were featured buyers during the day, with JP Morgan, Fimat, Man Financial, O'Connor and Refco key sellers.

 

Ethanol futures ended higher Monday, with the March future settling 2 1/2 cents higher at US$2.50 1/2 per gallon.

 

Oat futures ended mostly lower, failing to feed off the late strength seen in other grain and oilseed markets across the trading floor. CBOT March oat futures settled 1 1/2 cent lower at US$1.88 and May oats ended 2 3/4 cents lower at US$1.92 per bushel.