March 9, 2006

 

CBOT Corn Review on Wednesday: Stumble lower; lacks supportive news

 

 

Corn futures on the Chicago Board of Trade ended lower again Wednesday, stumbling to a three-week low, as the market continues to suffer from a lack of supportive news.

 

CBOT March corn settled 2 cents lower at US$2.19, and May corn ended 2 1/2 cents lower at US$2.28.

 

The market carved out new lows for the current move, quietly descending lower on a lack of underlying support in the face of bearish weather forecast for early plantings in the Midwest and abundant nearby supplies, traders said.

 

However, activity remained subdued with futures settling into a narrow trading range after early attempts to push prices failed to uncover follow through momentum. This was consistent, with the highs of the day quickly in place, traders said.

 

The market hovered in ranges through midday, battling the spillover momentum from higher wheat prices and sinking soybean values. As the session drew to a close, prices dropped to a new low, with late declines in soybeans attracting local selling down the stretch. Technical selling was also featured amid the May futures ability to penetrate support at its 50-day moving average.

 

Otherwise, activity was subdued, with strong buying from Goldenberg Hehmeyer supporting new crop contracts and Cargill providing early support to May futures.

 

The DTN Meteorlogix forecast said rainfall of up to two inches total will develop over the Midwest east of the Mississippi River through Thursday. These rains will provide a very good supplement to soil-moisture levels and could remove any soil moisture worries going into the spring field work season. Rainfall in the western Midwest will vary up to one inch, with the heaviest rains in central and southern Iowa through most of Missouri.

 

On tap for Thursday, U.S. Department of Agriculture is scheduled to release its weekly export sales report for the week ended March 2. Analysts surveyed by Dow Jones anticipate commitments in a range of 700,000 to 900,000 metric tonnes.

 

In pit trades, Cargill bought 1,500 May, Citigroup bought 400 May, Goldenberg Hehmeyer bought 5,500 December, Tenco bought 700 May and RJ O'Brien bought 500 July.

 

On the sell side, FCStonnee sold 500 May, ABN Amro sold 800 May, Calyon Financial, Fimat, and O'Connor each sold 1,000 May, Citigroup sold 600 May, and Man Financial sold 1,000 July.

 

Ethanol futures ended lower, continuing its retreat from higher levels. The April ethanol contract ended 2 cents lower at US$2.36 and May ethanol dropped 1 1/2 cent to US$2.32 1/2 per gallon.

 

Oat futures drifted lower, with the active May future able to find technical support at its 100-day moving average. CBOT March oat futures settled 3 cents lower at US$1.80 1/4 and May oats ended 2 1/2 cents lower at US$1.86 1/4 per bushel.