March 4, 2006

 

CBOT Corn Review on Friday: Near steady in choppy, range bound trade

 

 

Corn futures at the Chicago Board of Trade ended a choppy range-bound session near unchanged levels Friday, struggling to generate momentum in quiet trade.

 

CBOT March corn finished 1/4 cent higher at US$2.28 3/4, and May corn ended 1/4 cent higher at US$2.39 1/2 per bushel. For the week, March corn was 1 cent higher, and May corn was up 3/4 cent.

 

Overall market action was pretty subdued, with activity slowing after an early attempt to rally prices failed to attract follow through buying, analysts said.

 

The market held up pretty well in the face of bearish supply-side fundamentals once again, as bullish chart patterns and an unwillingness of traders to press prices amid the potential for fund buying to emerge limited downside risks.

 

The market managed to satisfy a near term technical objective of pushing the May future through resistance at US$2.39 3/4, but the early push failed to pack any speculative buying punch and quickly settled into a narrow, choppy range for the remainder of the day.

 

Light farmer and commercial selling helped cap advances as well, traders added.

 

Supply side fundamentals continue to generate bearish thoughts in the market, but the potential for fund buying, talk of good underlying demand and inflationary concerns limits downside potential. Pre-weekend positioning aided the mixed tonnee, with lingering concerns over bird flu applying mild pressure.

 

This was a consistent theme, with the absence of fresh market moving news keeping many traders idle heading into the weekend.

 

DTN Meteorlogix said Argentina's central crop belt has dry conditions on tap for the weekend, with a round of showers and thundershowers expected early next week. Temperatures will be variable on either side of normal.

 

In pit trades, ADM Investor Services bought 300 May, JP Morgan bought 1,500 May, Man Financial, RJ O'Brien, and Rosenthal each bought 500 May. On the sell side, ADM Investor Services sold 300 May, JP Morgan and Refco each sold 500 May, Goldenberg Hehmeyer sold 800 May, O'Connor sold 400 May and Shatkin/Arbor sold 400 July. Commodity funds were net sellers on the day.

 

Ethanol futures ended higher, with the April ethanol contract ending 2 cents higher at US$2.40 1/2 per gallon.

 

Oat futures ended to the upside Friday, in tune with advances in other grain markets. CBOT March oat futures settled 1/2 cent higher at US$1.83 and May oats ended 1 cent higher at US$1.89 1/2 per bushel.