August 15, 2006

 

CBOT Corn Review on Monday: Lower; Dec, Sep hit new contract lows

 

 

Chicago Board of Trade corn futures ended lower Monday, making new life-of-contract lows in September and December on active fund and technical selling before light commercial buying trimmed declines, sources said.

 

September declined 2 3/4 cents to US$2.22 cents per bushel and December fell 3 1/2 cents to US$2.38 1/4. E-CBOT day-session volume in December was 46,573 contracts.

 

Follow-through weakness from Friday's steep losses and overnight declines helped push prices lower from the opening, floor sources noted.

 

The funds liquidated their long positions, pushing the market lower, said Brian Hoops, president of Midwest Marketing Solutions in Yanktonne, S.D.

 

The market held above its contract lows in December early in the day, but it had no bounce and the fund selling pushed December to new lows, a commission house trader said.

 

News from the U.S. Department of Agriculture that two wild swans in Michigan tested positive for non-pathogenic bird flu had little market impact.

 

"I don't think it's a big deal at this time," said Joe Bedore, full member and floor manager at FC Stonnee. Floor sources said that market will continue to monitor the situation.

 

There was some commercial buying at the lows of the session which helped corn come off its lows, with some light short covering after the sell-off as well trimming the declines, a floor trader said.

 

USDA reported Export inspections were 45.856 million bushels, within the 38-50 million expected by analysts, but had little market impact as the market continued to react to Friday's larger-than-expected crop-production estimate, the trader noted.

 

Buyers Monday included FC Stonnee, which bought 1,000 December; ABN Amro, which bought 1,000 December; Fimat, which bought 1,000 December; and JP Morgan, which bought 1,000 December.

 

ADM Investor Services sold 3,000 December and 900 March, ABN Amro sold 1,600 December, JP Morgan sold 1,500 December and O'Connor sold 1,500 December.

 

Overall commodity fund selling was estimated at 8,500 contracts.

 

In options trading, Advantage Futures bought 5,000 December US$2.40 calls.

 

Oat futures ended modestly lower as light speculative selling weighed on the market, as did spillover weakness from corn, a floor trader said. Losses were limited as December held above the US$1.84 level, he added.

 

September oats settled 3 cents lower at US$1.74 1/2 per bushel while December declined 1 1/4 cents to US$1.84 1/4.

 

Ethanol futures finished mixed in thin trading. August ethanol fell 1 1/2 cents to US$2.54 cents per gallon and September declined 3 cents to US$2.52.

 

Monday afternoon the USDA is scheduled to release the weekly crop progress report at 3 p.m. CDT (2000 GMT). Traders and analysts expect conditions in the good-to-excellent category to improve by 1-to-3 percentage points from last week.