October 31, 2006

 

CBOT Corn Review on Monday: Lower on absence of speculative buying

 

 

Chicago Board of Trade corn futures ended with modest losses in quiet trading Monday as the lack of speculative buying limited the upside, sources said.

 

December corn settled 3 cents lower at US$3.29 1/2 per bushel and March declined 1 1/2 cents to US$3.43. e-CBOT day session volume in December was 49,217 contracts.

 

The absence of fund buying led to some profit-taking, a commission house analyst said. "It's all about the money flows and Monday the money flows were not as prevalent as in the last several trading sessions," he added.

 

Sharply lower crude oil futures prices also acted as a drag on prices, a floor trader said. Crude oil futures were trading over US$2.00 lower when open auction corn futures trade closed.

 

The lack of fresh fundamental news also limited the upside, a floor source said.

 

The U.S. Department of Agriculture reported weekly export inspections were 40.176 million bushels for the week ended Oct. 26, within the range expected by analysts and above the 30.4 million inspected last week. The news however, had little market impact.

 

Spillover weakness from wheat futures also limited buying interest with wheat trading below the US$5.00 level during the session for the first time since Oct. 23.

 

Forecasts expecting favorable harvest weather in much of the U.S. Midwest this week were cited by several traders as a bearish influence on the market, allowing farmers to harvest their crop which has been delayed in some parts of the region due to wet weather.

 

Traders anticipate that 69%-73% of the U.S. corn crop has been harvested as of Oct. 22. The USDA is scheduled to release the weekly crop progress report Monday afternoon.

 

On daily open auction technical charts, December remained well above its major moving averages and within the range established in last week's trade.

 

Buyers Friday included FC Stonnee, which bought 500 July and 400 December; RJ O'Brien bought 1,000 December; Rosenthal bought 800 March; Citigroup bought 600 March; and Tenco bought 500 July.

 

ABN Amro sold 800 December; Fimat sold 600 July; Iowa Grain sold 600 December; and Citigroup sold 500 March.

 

Overall, commodity fund buying and selling was even on the day, sources said.

 

Oat futures settled higher as commodity funds bought deferred contracts rolling out of December, floor sources said. Light hedge-related pressure from commercial interests was noted in March, they added. March equaled its life-of-contract high set earlier in the month.

 

There is nothing new fundamentally, a commission analyst said. "There is a lot of money everywhere looking for a home," he added.

 

December oats rose 2 1/4 cents to US$2.42 3/4 cents per bushel and March settled 3 1/4 cents higher to US$2.52.

 

Ethanol futures ended mixed in very light trade. November gained 4 cents to US$2.08 per gallon. December ended unchanged at US$2.03.