November 19, 2005

 

CBOT Corn Review on Friday: Futures lower; new contract lows set again

 

 

Corn futures traded at the Chicago Board of Trade settled modestly lower Friday, continuing the trading pattern established earlier in the week with several nearby months falling to new contract lows once again. The absence of any new positive inputs continues to weigh on futures, sources said.

 

December corn fell 1 1/4 cents to US$1.91 per bushel after trading down to US$1.90 3/4, a new life of contract low. March declined 1 1/4 cents to US$2.05 1/4, after setting a new low of US$2.05. May corn settled 1 3/4 cents lower at 2.13 1/4, off its new low of US$2.13.

 

"Now I guess the next downside target is US$1.84, the low on weekly continuation charts from 2001," a commission house broker said. Corn is stuck in a lower trending market and until something changes, this will continue to be the pattern, he said.

 

Weaker soybean futures at the opening and the lack of any positive catalysts combined to keep prices on the defensive.

 

"There is no reason to add to a position right now," a floor trader said. The market is content to slowly work its way lower for the present."

 

News of two more outbreaks of bird flu in China, bringing to 15 the number of cases the Chinese government has confirmed since Oct. 19, added to ongoing demand concerns.

 

An announcement Friday morning of a 116,000-metric-tonne sale of U.S. corn to unknown destinations had little impact on prices. There's obviously enough corn for everybody right now, the trader said.

 

Corn has been trending lower over the past several months on better-expected production despite severe drought conditions in parts of Illinois and Iowa this summer. A large carry-over supply from last year's record crop and this year's large production have combined to weigh on the market.

 

Buyers on Friday included Tenco buying 800 May and 200 December, Stern buying 100 May, Refco buying 300 July and 300 May and Citigroup buying 1,500 December.

 

Sellers Friday included Tenco selling 800 March and 800 December, O'Connor selling 200 December, Citigroup selling 200 December, ABN Amro selling 700 December and Cargill selling 100 December and 100 May.

 

Commodity fund selling was estimated at 2,000 contracts.

 

Oat futures finished modestly higher, with the December contract up 3/4 cent at US$1.68 per bushel.

 

Ethanol futures settled mostly lower. The January contract didn't trade and finished 3 cents lower at US$1.88 per gallon.