March 7, 2007

 

CBOT Corn Review on Tuesday: Mostly lower; lacks supportive news

 

 

Chicago Board of Trade corn futures ended mostly lower Tuesday, pressured by speculative selling amid the absence of fresh supportive news to support prices.

 

March corn ended 4 3/4 cents lower at US$4.12 1/2 per bushel, May corn settled 4 3/4 cents lower at US$4.22, and December finished 2 1/4 cents lower at US$4.06 1/2.

 

The inability of futures to follow through on overnight gains attracted speculative selling, as traders remain fearful of further speculative long liquidation, analysts said.

 

A quiet news front kept activity relatively light, with futures hovering within a narrow range for most of the day. Nevertheless, light speculative fund sales pinned futures in negative territory, while bullish long-range fundamentals kept a floor under prices, analysts added.

 

Light position evening ahead of Friday's U.S. Department of Agriculture supply and demand report was seen, as the market had little influences to direct prices, traders added.

 

USDA is scheduled to release its March supply and demand report Friday at 7:30 a.m. CST (1330 GMT). The average of estimates from a Dow Jones Newswires survey pegged corn 2006-07 ending stocks at 763 million bushels, up from February's estimate of 752 million. The range of estimates span from 748 million to 802 million bushels.

 

Meanwhile, the DTN Meteorlogix Weather forecast said the central U.S. is generally dry, which will continue for the rest of the week. Snow left by last week's blizzard is melting from temperatures that are varied across the region. They are somewhat below normal, but trending upward, except for the eastern Midwest, where temperatures are a little lower.

 

A few isolated snow or rain showers might fall across the Midwest and the Plains, but not enough to significantly affect transportation or soil moisture. An area stretching from southwest Missouri into Ohio will see some precipitation over the next few days, but the forecast puts totals at only two-10ths of an inch. The area immediately around the Great Lakes may see up to four-10ths of an inch, Meteorlogix reports.

 

In pit trades, JP Morgan bought 400 July, Prudential bought 400 March and Rand Financial bought 600 December. Sellers were light scattered, with UBS Securities a featured seller of 600 May. Speculative fund selling was estimated at 2,000 lots.

 

CBOT oat futures ended with a steady to mixed undertonnee, as futures found stability after recent volatile price action, analysts said. A rebound in world financial markets coupled with the absence of fresh news allowed futures to find their footing, bucking the lower theme in other grain futures. May oats closed unchanged at US$2.50 1/4 per bushel and December ended unchanged at US$2.47 1/2.

 

Ethanol futures ended mixed, with the April contract settling.