April 3, 2004

 

 

CBOT Corn Review On Friday: Extends Rally; Sets New Contract Highs

  

In a continuation of the bullish momentum of the past two trading sessions, corn futures on the Chicago Board of Trade ended the week on solid footing with most futures advancing to new contract highs Friday.

   

CBOT May corn ended 4 3/4 cents higher at $3.30 1/2, Jly finished 5c higher at $3.37, and Dec settled 7 3/4c higher at $3.34 1/4 per bushel.

   

The market remains fundamentally supported by strong demand outlooks and concerns 2004 production based on Wednesday's smaller-than-expected plantings estimate will not meet expanding U.S. and global demand, analysts said.

   

New-crop futures took on a leadership role in the market again, with tightening stock projections and fears current acreage outlooks leave little or no room for any production problems in the upcoming growing season.

   

The back end of the market, rallied to new heights, with speculative and commercial buyers combining to keep prices supported, as downside risks remain limited.

   

Strong domestic needs and a steady flow of export demand despite the market's current price structure, was an encouraging sign to traders, with market bulls comfortable adding to their record length amid ideas prices were not susceptible to any significant setbacks unless new features arise to break the supportive trend in the market.

   

Ahead of the open, U.S. Department of Agriculture announced private exporters reported the sale of 230,000 metric tons of U.S. corn to unknown destinations for delivery in the 2003-04 marketing year.

   

With attention shifting to new crop planting and production outlooks, weather conditions across the central U.S. are beginning to attract increased attention, with traders eyeing soil conditions for any signs of potential planting problems in the next few weeks, said a CBOT commission house broker.

   

Wet weather will envelop the croplands of Texas, as well as portions of the Oklahoma panhandle into the weekend, providing the region will some beneficial rainfall and a boost to soil moisture levels. Relatively quiet and dry weather will be found across the Deep South into Thursday, favoring spring fieldwork and planting operations. Quiet and relatively dry conditions will also occur throughout most of the corn belt into next week, Global Weather Services said.

   

In CBOT corn trades, ADM Investor Services bought 200 May and 500 Jly, FCStone bought 300 Jly, Carr Futures bought 400 May, Cargill Investor Services bought 1,000 May and 1,300 Jly, Fimat bought 1,000 Jly, Refco bought 1,000 Dec, and UBS Securities bought 300 May.

   

On the sell side, Cargill sold 300 May, ABN Amro Carr Futures sold 300 Jly, Carr Futures sold 1,000 May, Rand Financial sold 1,500 May and 200 Dec, Refco sold 700 May and 300 Jly, Shatkin Arbor Karlov sold 500 May and UBS Securities sold 400 Dec.

   

Commodity funds were estimated buyers of between 5,000 and 6,000 contracts.

   

In spreads, ADM Investor Services spread 2,500 Jly/May.

   

In options, Tenco sold 2,000 May $3.20 puts, ADM Investor Services bought 1,000 Dec $2.40 puts.

   

Oat futures ended mostly higher, with the new crop Dec future advancing to a new contract high, bolstered by smaller acreage outlooks and strength in other grains.

   

CBOT May oats settled 1c lower at $1.77 3/4, Jly ended 1/4c higher at $1.83 3/4, Sep finished 1 3/4c higher at $1.88 1/4 and Dec ended 2c higher $1.91.