March 13, 2007

 

CBOT Corn Review on Monday: Ends lower on technical weakness, fund sales

 

 

Chicago Board of Trade corn futures settled moderately lower Monday as technical and speculative fund selling in the absence of fresh news pressured prices, sources said.

 

May corn fell 8 1/4 cents to US$4.09 1/4 per bushel, July dropped 7 3/4 cents to US$4.19 3/4, and December settled 5 cents lower to US$4.02 3/4.

 

The technical side of the market "has taken on a weaker posture," said Phil Roach, analyst at Roach Ag Marketing Services.

 

Since the Asian stock market sell-off several weeks ago, the grain markets have taken on a different character as speculative liquidity has dried up, Roach said.

 

In late activity, rumors that a commercial grain firm expects smaller soybean planted acres and larger corn acres this spring also pressured prices, with fund selling also pushing corn prices lower, a floor trader said.

 

Speculative fund selling was estimated at 9,000 contracts.

 

There was little fresh fundamental news out during the session with the exception of export inspections by the U.S. Department of Agriculture.

 

The USDA reported corn inspected for export was 34.6 million bushels in the week ended March 8, well below the 56.3 million inspected last week and the 40-48 million bushels expected by analysts.

 

"Judging by what's going on out here in the country - our snow banks are melting and the weather outlook looks good - I don't believe there is any reason to expect delayed plantings at this time" will support prices, Roach said.

 

On day session technical charts, May corn settled at its lowest level since early February and fell beneath most major moving averages except its 100-day and 200-day averages.

 

Buyers on Monday included FC Stonnee, which bought 1,700 July; and Fimat, which bought 600 May. JP Morgan sold 200 May and RJ O'Brien sold 200 May.

 

In options trading Man Financial bought 4,000 December US$3.80 calls and sold 4,000 December US$4.80 calls.

 

Oat futures finished on either side of unchanged as light fund buying helped prices remain near Friday's levels despite late weakness in corn and wheat, a floor trader said.

 

Oats were supported by thin fund buying interest all day, the trader said.

 

May oats settled 1/2 cent lower at US$2.62 1/2 per bushel and July rose 1/4 cent to US$2.66 1/4.

 

Ethanol futures ended higher in quiet trade. The April contract rose 5 cents to US$2.33 per gallon. The May contract settled 3.5 cents higher at US$2.205 per gallon.