November 30, 2005

 

CBOT Corn Review on Tuesday: New lows set on fund selling,soy weakness

 

 

Corn futures at the Chicago Board of Trade settled at lower levels Tuesday, making new life-of- contract lows once more as fund selling, early spillover weakness from soybeans and the lack of fresh news weighed on prices, sources said.

 

December corn lost 1 1/2 cents to US$1.86 1/4 per bushel, March corn retreated 1 1/4 cents to US$2.00 1/2, and May corn also slipped 1 1/4 cents to US$2.09 1/4 per bushel. New contract lows were set in all three months.

 

It was another grind-it-out type of day, said Vic Lespinasse of A.G. Edwards & Sons. The funds sold it Monday and they came back and sold even more Tuesday. And, some of the early weakness in soybeans spilled over into corn, adding to the negative tonnee, he added.

 

Commodity fund selling was estimated at 8,600 contracts.

 

Several traders noted wheat-corn spreading, buying March wheat and selling March corn, adding to the bearish tonnee.

 

Favorable growing weather in Argentina's corn-producing region and continued concerns about the potential impact of bird flu on feed demand were also cited by floor traders. China reported two additional cases of bird flu overnight.

 

Buyers on Tuesday included Refco buying 2,000 March and 200 December; Refco Investor Services buying 2,000 March; Man Financial buying 1,000 March; Tenco buying 600 December; and Stern buying 500 December.

 

Sellers Tuesday included ADM selling 400 December and 100 March; Fimat selling 2,000 March and 200 December; Iowa Grain selling 900 December and 3,500 March; Man Financial selling 2,000 March and 400 May; Gelber selling 2,000 December; and R.J. O'Brien selling 800 December.

 

In spread trading, ADM was noted spreading 2,000 December-March December-July; Tenco spread 2,000 March-July and 1,000 December-July; and FC Stone spread 1,500 December-March.

 

Wednesday is first notice day for December corn futures with deliveries expected in the range of 400-2,000 contracts.

 

Oat futures settled lower in a volatile session, with the price of the December contract trading above the December corn price for the first time since 2002, sources said. Short covering ahead of first notice day on Wednesday pushed prices sharply higher before selling interest emerged to drive prices lower on the session. December oats, which traded as high as US$1.97 at one point in the session, finished 2 1/2 cents lower at US$1.81 1/2 per bushel. The March contract settled 3 3/4 cents to US$1.84 1/2.

 

Ethanol futures finished mostly higher. The January contract did not trade and finished 3 cents lower at US$1.83 1/2 cents per gallon.