March 29, 2006

 

CBOT Corn Review on Tuesday: Near unchanged in quiet sideways trade

 

 

Chicago Board of Trade corn futures ended narrowly mixed in quiet trade Tuesday, continuing its sideways theme heading toward the end of the month and Friday's prospective planting and quarterly grain stocks reports.

 

CBOT May corn settled 1/2 cent higher at US$2.22 1/4, July corn ended 3/4 cent higher at US$2.33 1/4 and December corn finished unchanged at US$2.54 1/2.

 

The lack of fresh fundamental news to generate interest failed to provide an incentive for traders to step off the sidelines, with participants looking ahead to Friday's U.S. Department of Agriculture reports, said Shawn McCambridge, senior grains analyst with Prudential Financial in Chicago.

 

The market has settled into a trading range, content to hover near the US$2.20 per bushel level basis May futures, with the recent low of US$2.17 capturing the downside, while price moves toward US$2.30 encounters increased selling pressure, analysts added.

 

The theme was consistent from the outset, with traders anticipating the sideways theme will linger into Friday's reports unless fresh fundamental news or aggressive speculative fund activity emerges.

 

Otherwise, the rolling for May positions was a featured attraction, with traders beginning to shift attention to new crop issues, looking for clarity on next years crop with weather and planting conditions coming into focus, added McCambridge.

 

USDA is scheduled to release its prospective planting and quarterly grain stock reports Friday at 7:30 a.m. CST (1330 GMT). The average estimate of trade projections peg 2006 corn acreage at 80.576 million acres from a range of guesses that span from 80.091 million to 81.000 million. The average of quarterly stock estimates was 6.987 billion bushels from guesses that ranged from 6.942 billion to 7.057 billion.

 

Meanwhile, over the next three to five days, the DTN Meteorlogix forecast calls for some notable rainfall of more than one inch in the Midwest, with best coverage in the western part of the region, primarily Iowa. With the rainfall prospect comes a good chance for continued soil moisture re-charge in a very dry sector of the Midwest. This activity is taking place just weeks ahead of the busy spring field work season, Meteorlogix added.

 

In pit trades, Calyon Financial bought 500 May, JP Morgan bought 400 May and 400 December, RJ O'Brien bought 500 May, and Tenco bought 300 May.

 

On the sell side, Calyon Financial sold 400 May, Citigroup, Goldenberg Hehmeyer and Refco each sold 300 May. JP Morgan spread 3,000 May/July and Fimat spread 1,500 July/May.

 

Ethanol futures ended higher across the board Tuesday. The April ethanol contract settled 2 cents higher at US$2.48 and May ethanol ended 1/2 cent higher at US$2.50 per gallon.

 

Oat futures ended mostly higher, plodding along in quiet trade, as the market awaits fresh news and Friday's USDA planting and stock reports. CBOT May oat futures settled 1 1/4 cent higher at US$1.74 and July oats ended 3/4 cent higher at US$1.76 1/2 per bushel.