March 1, 2008

 

CBOT Corn Review on Friday: Mixed, consolidative trade, new highs set

 

 

Chicago Board of Trade corn futures ended narrowly mixed Friday, struggling to find direction as the market was torn between surging soy futures and plunging wheat futures, analysts said. However, new contract highs were established.

 

March corn ended 2 3/4 cents higher at US$5.46, May corn settled 1/4 cent higher at US$5.56 1/2 and December finished 3/4 cent lower at US$5.64 3/4.

 

Corn remained under the influence of outside markets, as a quiet news front kept traders taking a cautious approach for most of the day, analysts said.

 

The unwinding of wheat/corn spreads did provide mild support, as did the continued rise to new all-time highs in the neighboring soybean market, analysts added.

 

Bullish prospects of a tightening balance sheet remained an underpinning feature, but mild concerns over demand have arisen as Thursday's marketing-year low export sales figure raised fears corn may be starting to show signs of demand rationing at current prices, a CBOT floor analyst said.

 

Otherwise, two-sided consolidative trade was featured, with end-of-the month profit-taking applying pressure, and spillover from soybeans generating late support, traders added.

 

The DTN Meteorlogix weather forecast said Argentina's central and east crop areas will see more rains during the next week, along with cool conditions. This weather pattern is mostly favorable for filling crops. Western portions of the region will have some drier weather, but this sector has ample soil moisture for continued favorable development.

 

In pit trades, JP Morgan bought 400 March, Fortis bought 500 May, UBS Securities bought 500 May and 500 July. JP Morgan sold 500 May and 900 December, Newedge USA sold 800 May, and Fortis sold 1,000 May.

 

CBOT oat futures closed higher, rallying to new contract highs on speculative fund buying.

 

"It was a continued fund type buying rally, as it came all on the electronic platform," a trader said. "It has a fund feel to it as from a fundamental perspective, feeding demand doesn't look that enriching at these lofty price levels," he added. May oats jumped 7 1/4 cents to US$4.34 3/4, and July oats ended 7 1/2 cents higher at US$4.45.

 

Ethanol futures were mixed at the close. March ethanol was 0.2 cents lower at US$2.360 per gallon, and April ethanol was up 1.8 cents at US$2.360.