March 17, 2006

 

CBOT Corn Review on Thursday: Falls to seven-week lows

 

 

Corn futures on the Chicago Board of Trade stumbled lower Thursday, falling to seven-week lows as bearish fundamental influences attracted speculative sellers.

 

CBOT May corn settled 4 3/4 cents lower at US$2.24 1/2, and July corn ended 4 1/2 cents lower at US$2.35.

 

The market drifted lower from the outset, as the combination of bearish supplies, improved planting conditions and technical weakness weighed on prices, said Shawn McCambridge, senior grains analyst with Prudential Financial in Chicago.

 

The combination of large supplies and recharged Midwest soil conditions heading into the planting season served as anchors to the market, but the declines were gradual for most of the day, with traders unwilling to be overly aggressive sellers amid the potential for fund buying to reemerge.

 

Nevertheless, without fund-buying support, bearish fundamentals took center stage with spillover weakness from a drop in wheat futures enabling futures to penetrate underlying support levels down the stretch. This continued into the close, with speculative selling gaining momentum to promote a downside bias in the market, traders added.

 

Meanwhile, the DTN Meteorlogix forecast said snow and rain are moving through northern Iowa northward to southern Minnesota Thursday. Light precipitation, favoring the western Midwest and southern Midwest, will redevelop Sunday, with heavier snow or rain tending to favor the southern half of the region during Monday into Monday night.

 

The U.S. Department of Agriculture said 2005-06 corn weekly export sales totaled 1,029,600 metric tonnes, 25% under the previous week and 12% below the prior four-week average. Trader expectations ranged from 800,000 to 1,100,000 tonnes.

 

In pit trades, ADM Investor Services and JP Morgan were buyers of old-crop May with JP Morgan and Goldenberg Hehmeyer active buyers of new-crop December futures as well.

 

On the sell side, JP Morgan actively sold May, with Calyon Financial, Citigroup and Man Financial sellers of May and with Fimat selling December. Commodity fund selling was estimated near 10,000 lots.

 

Ethanol futures ended lower Thursday. The April ethanol contract settled 3 cents lower at US$2.40 per gallon.

 

Oat futures ended lower across the board. CBOT May oat futures settled 3 cents lower at US$1.75 1/4 and July oats ended 2 3/4 cents lower at US$1.75 3/4 per bushel.