April 6, 2004

 

 

CBOT Corn Review On Monday: Mixed; Fails To Sustain Early Highs

 

Corn futures on the Chicago Board of Trade ended mixed, with nearby and deferred months showing contrasting direction after setting new contract highs earlier in the session.

 

CBOT May corn settled 1 cent lower at $3.29 1/2, Jly ended 3/4c lower at $3.36 1/4, and Dec finished 1c higher at $3.35 1/4 per bushel.

 

The inability of the market to hold initial advances, a lack fresh news and disappointing weekly export inspections data tempered early enthusiasm, prompting speculative selling, traders said. The deferred new-crop contracts, on the other hand, managed to sustain their upward mobility with carryover strength from last week's supportive acreage estimates keeping the back months underpinned.

 

The rolling of the May contract into new-crop futures as well as participants extending coverage added to the day's mixed tone.

 

Nevertheless, solid underlying demand interest with domestic and export usage showing no signs of abating in the near term limited downside risks.

 

Futures initially were propelled to new contract highs across the board, in continuation of the last week's supportive stocks and planting projections from the U.S. Department of Agriculture.

 

However, the inability of futures to sustain the gains amid a lack follow through momentum and spillover weakness from faltering nearby soybean prices pressed May and Jly futures into negative territory for most of the day.

 

U.S. Department of Agriculture released its export inspections report for the week ended April 1. Corn inspected for export totaled 28.372 million bushels, down 14.5% from the previous week. Pre-release trade estimates anticipated a figure in the 32 million to 36 million bushel range. Accumulated inspections through the first 31 weeks of the 2003-04 marketing year totaled 1.105 billion bushels, up 24.9% from the pace of inspections at the same time last year.

 

Looking ahead, the USDA is scheduled to release its monthly supply and demand report Thursday at 0730 CT (1230 GMT). CBOT markets will be closed Friday in observance of the Good Friday holiday.

 

Meanwhile, scattered areas of generally light rain are possible Wednesday into this weekend in the U.S. corn belt. High temperatures should warm into the 60s or lower 70s Fahrenheit Tuesday and Wednesday before cooling into the 40s and 50s Thursday into the weekend, Global Weather Services said.

 

In CBOT corn trades, Cargill bought 800 Jly, FCStone bought 400 Jly, Fimat bought 1,000 Jly, RJ O'Brien bought 500 Jly and 200 Dec, Refco bought 300 May, Rosenthal bought 400 Jly, Tenco bought 500 Jly and 300 Dec, and UBS Securities bought 400 Jly.

 

On the sell side, Term Commodities sold 300 Jly, Carr Futures sold 700 May, Cargill Investor Services sold 500 May and 400 Jly, Fimat sold 400 May, Merrill Lynch sold 700 May, RJ O'Brien sold 500 Jly, Rand Financial sold 700 May, and Refco sold 300 Jly.

 

Commodity funds were estimated sellers of 1,000 contracts.

 

In spreads Refco spread 1,000 Dec/May, Cargill Investor Services spread 3,500 Jly/May.

 

In options, Cargill bought 2,000 Jly $3.40 calls, sold 2,000 Jly $3.80 calls, bought 2,500 Jly $3.60 calls, sold 2,500 Jly $3.90 calls, and Refco bought 1,000 May $3.10 calls and sold 1,000 May $2.80 calls

 

Oat futures ended to the downside, scoring key reversals in most contracts. The market ended with outside lower finishes on technical charts. The actively traded contracts with the exception of the nearby May future all set new contract highs, before retreating lower on technical and spillover weakness from other grains.

   

CBOT May oats finished 4c lower at $1.73 3/4, Jly settled 4c lower at $1.79 3/4, Sep dropped 2 3/4c to $1.85 1/2 and Dec ended 2c lower at $1.89.