February 28, 2008

 

CBOT Corn Review on Wednesday: Lower; extend consolidation of prior highs

 

 

Chicago Board of Trade corn futures ended lower Wednesday, continuing its consolidative theme, as the market stabilizes after setting new highs earlier in the week.

 

March corn ended 5 1/2 cents lower at US$5.25, May corn settled 6 cents lower at US$5.38 and December finished 3 cents lower at US$5.53 1/2.

 

In the absence of fresh fundamental news to provide near-term price direction, futures have settled into a consolidative mode, said Shawn McCambridge, senior grains analyst with Prudential Bache Commodities in Chicago.

 

Heading into Wednesday's session, the market was overbought, and without new bullish features, traders took the opportunity to take some profits heading into the end of the month, analysts said.

 

There is nothing going on fundamentally until 2008-09 marketing year fundamentals start taking center stage, leaving futures in more of a technical mode, with consolidation a featured attraction, McCambridge added.

 

The market is settling into a trading range, with prospects for a tightening balance sheet limiting downside moves while hedge-related pressures keep a hold on upside potential, traders said.

 

The market satisfied short term upside objectives this week, and without a tight stock scenario currently in the market place, buyers are unwilling to chase prices, leaving futures to chop around until mid March, McCambridge said.

 

Meanwhile, the DTN Meteorlogix weather forecast said the general weather pattern for crops in Argentina is favorable for late-season development. Periodic thundershower activity and only brief hot spells means mostly favorable conditions for filling crops.

 

On tap Thursday, the U.S. Department of Agriculture is scheduled to release its weekly export sales report at 8:30 a.m. EST. Trade estimates put soybean export sales at 600,000 to 950,000 metric tonnes.

 

CBOT oat futures closed lower in a pullback from strong recent gains, a floor trader said. There was some spillover pressure weakness in the corn and soybean markets, he said. March oats fell 4 3/4 cents to US$4.12 1/2 per bushel, and May oats slipped 5 cents to US$4.25.

 

Ethanol futures were lower at the close. April ethanol was down 1.5 cents at US$2.28 per gallon, and May ethanol was 1 cent lower at US$2.26.