June 1, 2006

 

CBOT Corn Review on Wednesday: Lower in choppy, month-end trade

 

 

Corn futures settled modestly lower Wednesday in active trade on the close. End-of-month position squaring, spillover selling from sharp losses posted in wheat futures and a sell-off in precious metals and energy markets kept prices on the defensive late, sources said.

 

July corn fell 3 1/4 cents to US$2.51 1/4 per bushel and December ended 2 3/4 cents lower at US$2.77.

 

Month-end liquidation and Tuesday's better-than-expected crop conditions report weighed on the market initially, a commission house analyst said.

 

Additional weakness was noted from near-term weather forecasts, with favorable growing weather expected over the next several days, he added.

 

A sharp retreat in wheat futures added to the weak tonnee late in the session, a floor trader said. July wheat plunged 18 1/2 cents to US$3.93 1/2 as month-end profit-taking pushed prices in that month to their lowest level since early May, sources said.

 

Lower outside markets - weaker metals and energy prices - also limiting buying interest, the trader added.

 

In the western U.S. Midwest there is a chance for scattered showers Wednesday with mainly dry conditions forecast Thursday and Friday, DTN Meteorologix Weather said. Temperatures are expected to average near to above normal.

 

In the eastern U.S. Midwest, there is a chance for scattered showers and thundershowers with amounts .25-1.00 inch and locally heavier Wednesday and Thursday. Temperatures are forecast to average near to above normal in the period, DTN Meteorologix Weather said.

 

Buyers Wednesday included Fimat, which bought 700 July and 500 December; JP Morgan bought 500 July; Rand bought 400 July and 300 December; and Goldenberg-Hehmeyer bought 900 July.

 

Sellers Wednesday included Merrill Lynch, which sold 1,300 July; Prudential sold 500 July; O'Connor sold 300 July; and Citigroup sold 1,000 July as part of a corn-soybean spread.

 

In spread trading, ABN Amro bought 1,000 July-December.

 

Oat futures settled at higher levels as active spread trading with participants rolling out of the nearby July and into the September supported the deferred months, an oat trader said.

 

Commercial-related buying of the July while selling the September helped provide support to the nearby month, he added. Fimat bought 1,000 July-September.

 

The July contract ended 1 3/4 cents higher at US$1.82 per bushel and the December contract rose 6 cents to US$1.86 1/2.

 

Ethanol futures ended higher. The June contract gained 12 cents to US$3.63 per gallon and the July contract settled 3 cents higher at US$3.45.