December 10, 2005

 

CBOT Corn Review on Friday: Bounces off new lows to finish higher

 

 

Corn futures at the Chicago Board of Trade ended Friday at slightly higher levels, shrugging off early losses built on Friday morning's larger-than-expected ending stocks figure in Friday's supply/demand report.

 

Several futures contracts set new lows in early trade, but the lack of follow-through selling coupled with thin buying interest helped futures finish in positive territory, sources said.

 

The U.S. Department of Agriculture estimated corn ending stocks at 2.419 billion bushels, well above the average analyst estimate of 2.339 billion and 100 million bushels above the 2.319 reported in the November report.

 

The increase in the stocks figure was due to the USDA reducing the amount of corn exports in 2005-06 from 2 billion bushels to 1.9 billion bushels, on increased competition from China and the Ukraine in world corn export markets, the USDA said.

 

December corn settled 1 1/2 cents higher to US$1.89 3/4 per bushel, March rose 2 cents to US$2.03 3/4, and May gained 1 3/4 cents higher to US$2.12 1/2 per bushel.

 

"The market made new contract lows and it popped right back up," said Vic Lespinasse, with AG Edwards & Sons. Considering that the USDA raised the world carryover, and increased Chinese production and exports, the market acted very well, he added.

 

Several floor analysts noted spillover support from soybean meal and soybeans late in the session, which also helped underpin corn futures.

 

Trading was termed "sloppy" by one commission house broker, with thin order flow for much of the session, he said.

 

Buyers on Friday included F.C. Stonnee buying 1,000 March, Tenco buying 500 March, ABN Amro buying 400 March and Prudential Financial buying 200 March.

 

Sellers Friday included RIS division of Man Financial selling 500 March, Man Financial selling 400 March, Rand Financial selling 500 March and R.J. O'Brien selling 200 March.

 

Commodity fund selling was estimated at 1,500 contracts.

 

Oat futures settled unchanged to higher with the March future advancing 1 1/4 cents to US$1.98 3/4.

 

Ethanol futures finished higher across the board with the most-active April contract rising 7 cents and settling at US$2.00 per gallon.

 

Friday afternoon, the Commodity Futures Trading Commission is scheduled to release the latest Commitment of Traders data, and on Monday the USDA is scheduled to release the weekly export inspections report at 10:00 CST (1600 GMT).