March 28, 2006

 

CBOT Corn Review on Monday: Ends up on spec buys, soy spillover

 

 

Chicago Board of Trade corn futures ended firm Monday, rebounding from prior losses on speculative buying and spillover support from soybeans.

 

CBOT May corn settled 3 cents higher at US$2.21 3/4; July corn ended 2 3/4 cents higher at US$2.32 1/2; and December corn finished 3 cents higher at US$2.54 1/2.

 

After liquidating over 60,000 corn longs from the market in the last three weeks, speculative fund longs tiptoed back into the market, said Tim Hannagan, an analyst with Alaron in Chicago.

 

The market displayed price strength from the outset, with follow-through buying from heavy volume gains overnight, talk of increased feed demand in China and sympathetic buying from an early surge in soybean prices. The combination laid the groundwork for the gains, traders said.

 

Trade positioning ahead of Friday's plantings and quarterly stock reports and end-of-the-month profit-taking were featured attractions as well. Otherwise, futures had little fundamental influences to direct prices, with futures stabilizing after early gains failed to challenge technical resistance at the May contract's 100-day moving average.

 

Traders said upside movement was also limited by bearish supply-side fundamentals and improved Midwest soil conditions.

 

Meanwhile, the DTN Meteorlogix forecast calls for several episodes of rain showers and some light snow across the Midwest. West of the Mississippi River, total precipitation this week will range from one-half to more than two inches. From the Mississippi River east, precipitation will range from one-half to one and one-half inches. The oncoming moisture will continue to recharge soil moisture levels. Fieldwork delays are not an issue this early in the planting calendar.

 

The U.S. Department of Agriculture said corn inspected for export in the week ended March 23 totaled 36.133 million bushels. The export figure was down 22.4% from last week's 46.564 million. Analysts expected corn inspections in a range of 38 million to 42 million bushels. Accumulated corn export inspections for the 2005-06 marketing year total 1.046 billion bushels, 7.9% above last year's 969.4 million at the same time.

 

In pit trades, Man Financial bought 300 May, JP Morgan bought 1,000 May and 1,000 December, Rand Financial bought 300 December, and Refco bought 400 May. Commodity funds were net buyers of near 2,500 contracts on the day.

 

On the sell side, Fimat bought 800 May, Iowa Grain sold 300 May, JP Morgan sold 800 May, and Refco sold 300 May. JP Morgan spread 5,000 May/July.

 

Ethanol futures ended mixed Monday. The April ethanol contract settled 1 cent lower at US$2.46 per gallon.

 

Oat futures ended higher, in step with the firm tonnee in other grains. CBOT May oat futures settled 2 cents higher at US$1.72 3/4 and July oats ended 1 cent higher at US$1.75 3/4 per bushel.