March 8, 2007

 

CBOT Corn Review on Wednesday: Settles up on speculative fund buying

 

 

Chicago Board of Trade corn futures ended Wednesday's session posting modest gains, supported by speculative fund buying in the absence of aggressive selling pressure.

 

March corn ended 3 1/4 cents higher at US$4.15 3/4 per bushel, May corn settled 2 1/2 cents higher at US$4.24 1/2, and December finished 2 3/4 cents higher at US$4.09 1/4.

 

The market found its footing after early weakness was quickly absorbed, with end user buying providing support before speculative funds stepped up to firmly plant prices in positive territory, a CBOT floor analyst said.

 

Overall activity was relatively subdued, with the market effectively consolidating or taking a breather ahead of Friday's U.S. Department of Agriculture supply and demand reports.

 

Nevertheless, traders said underlying support stemmed from mild concerns surrounding the transportation strike in Argentina at a time when export demand begins to shift to South American origins, an analyst said.

 

However, the gains were seen as more of buying not meeting much resistance, as logistical strikes are usually resolved fairly quickly in South America, the analyst added.

 

USDA is scheduled to release its March supply and demand report Friday 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 estimates fell within range of 748 million to 802 million bushels.

 

On tap for Thursday, USDA is scheduled to release its weekly export sales report for the week ended March 1. Analysts surveyed by Dow Jones Newswires anticipate commitments in the 700,000 to 900,000 metric tonne range.

 

In pit trades, FCStonnee bought 600 May and 1,000 December, Tenco bought 600 May and 500 July, Man Financial bought 800 December, and UBS securities bought 2,000 May. Speculative fund buying was estimated near 5,000 contracts.

 

UBS Securities sold 1,500 May,with light, scattered selling reported from various commission houses.

 

CBOT oat futures ended higher across the board, with nearby contracts the upside leader on speculative fund buying, traders said. The funds came for the front months, with the unwinding of some new crop/old crop spreads aiding the advances, traders added. May oats closed 11 cents higher at US$2.61 1/4 per bushel and December ended 1 1/2-cent higher at US$2.49.

 

Ethanol futures ended higher, with the April contract settling 0.150 higher at US$2.320, and the May contract settling 0.070 higher at US$2.220.