September 20, 2006

 

CBOT Corn Review on Tuesday: Lower despite wheat rally

 

 

Chicago Board of Trade corn futures ended modestly lower Tuesday, unable to generate any upside momentum despite strong gains in wheat futures, sources said.

 

December slipped 1 1/4 cents to US$2.46 1/2 cents per bushel, and March also fell 1 1/4 cents, to US$2.60 1/4. e-CBOT day session volume in December was 38,488 contracts.

 

Corn was on the defensive as traders bought wheat and sold corn, a commission house analyst said. Seasonally, it's the time of the year to buy wheat and sell corn and that happened Tuesday, the analyst added. December wheat settled 13 1/2 cents higher at US$4.09.

 

The lack of follow-through buying from Monday's gains and the inability of the market to move past resistance at the US$2.50 level in December on open auction technical charts added to the negative tonnee, floor sources said.

 

The market has rallied over the past several sessions and was due to consolidate, a trader added.

 

The market was stuck between the gains in wheat and the weakness in soybeans, and the soy weakness added to the poor tonnee in corn, he noted.

 

November soybeans declined 8 3/4 cents to US$5.44 1/4.

 

The weekly crop conditions released Monday reported another increase in conditions from the previous week, which is unusual and leads to ideas that big crops get bigger, another trader said.

 

The U.S. Department of Agriculture reported that 59% of the U.S. corn crop was rated in good-to-excellent condition, up two percentage points from the previous week. In 2005, only 52% of the crop was rated in good-to-excellent condition for the same time period.

 

Buyers Tuesday included Fimat, which bought 1,000 December; JP Morgan, which bought 600 July; and Rosenthal, which bought 400 July.

 

FC Stonnee sold 500 December, Fimat sold 1,000 December, and Goldenberg-Hehmeyer sold 500 December.

 

Commodity fund buying was estimated at 1,200 contracts.

 

Oat futures settled higher as technically based fund buying remains the feature of the market, a floor trader said. The funds were buyers and the commercials were in hedging, he added.

 

December oats ended 1 3/4 cents higher at US$2.03 per bushel and March gained 2 1/4 cents to US$2.09 1/4.

 

Ethanol futures ended mostly higher. October ethanol did not trade and settled 1/2 cent lower at US$1.84 per gallon and November gained 1 1/2 cents to US$1.83 1/2.