October 26, 2005

 

CBOT Corn Review on Tuesday: Little changed in absence of fresh inputs

 

 

Corn futures at the Chicago Board of Trade finished little changed Tuesday as spillover support from wheat and soybeans earlier in the session gave way to light selling interest in the absence of fresh news, sources said.

 

December settled unchanged at US$1.99 1/2, after dipping to a new contract low of US$1.98 3/4. March corn ended unchanged at US$2.12 3/4, and May corn also finished even with Monday's settlement at US$2.21 1/4.

 

"The dominant issue remains the large supply," said Don Roose, president of US Commodities in West Des Moines, Iowa. "As we harvest the last 30% of this crop, we are putting a lot of corn into temporary storage. This supply needs to move in the next two to three months."

 

Light buying interest on the opening and spillover support from stronger soybean and wheat futures helped support prices initially. However, after initial buying was exhausted, corn futures returned to negative territory with December and March corn sinking to new life-of-contract lows near midsession for the third day in a row before light position evening arrived to trim the losses.

 

Short covering and hopes of wheat exports to Iraq underpinned wheat futures, while soybean futures were supported by light technical buying, sources said.

 

U.S. Department of Agriculture reported Monday that 65% of the U.S. corn crop had been harvested, in line with analyst expectations and slightly above the five-year average of 62%.

 

Harvest progress was above the pace set in 2004 in every major corn state except Indiana.

 

Continued reports about the spread of Avian bird flu and its potential impact on soymeal demand, a feed competitor to corn, was also noted by traders as a concern.

 

Buyers on Tuesday included JP Morgan buying 1,500 December, UBS buying 500 December, Fimat buying 500 December, Refco Investor services buying 500 December, Cargill buying 200 May and ADM buying 100 May.

 

Sellers Tuesday included Fimat selling 800 December, Calyon Financial selling 1,000 December, Bunge selling 300 March, Cargill selling 200 May and Tenco selling 100 December and 100 May.

 

Commodity fund buying was estimated at 2,000 contracts.

 

Oat futures ended mostly lower with the December contract 1 1/2 cents lower at US$1.67 per bushel.

 

Ethanol futures settled mostly higher as sharply higher energy prices lifted ethanol. The January contract gained 4 cents, settling at US$1.84 per gallon.