December 15, 2005

 

CBOT Corn Review on Wednesday: Lower; march hits technical resistance

 

 

Corn futures at the Chicago Board of Trade finished lower on Wednesday after failing to breach stiff resistance at the US$2.10 level in March in early trade, with commercial selling and an increase in farmer sales putting prices on the defensive, sources said.

 

March corn fell 1 1/2 cents to US$2.07 1/4 per bushel, May declined 1 1/2 cents to US$2.16 1/4, and July lost 1 cent to US$2.24 3/4 per bushel.

 

The rally up to US$2.10 in March brought out good farmer and commercial selling with the inability of March to trade above that level, leading to thin fund selling, as US$2.10 is seen as a solid resistance level, a commission house broker said.

 

"It was the funds versus the farmers today," said Don Roose, president of U.S. Commodities in West Des Moines, Iowa. The funds got caught short and they covered a little on Wednesday, but farmer selling increased. Prices remain anchored by the large supply, he added.

 

Stronger wheat futures prices had little impact on corn as it remains a follower of soybeans and soybean meal, a floor analyst said. Both soybeans and soy meal settled lower after finishing higher on Tuesday.

 

Sharply lower precious metals prices dampened recent talk of outside market buying influence, sources said. January gold fell US$14.60 to US$507.30.

 

News that Japan had purchased more than 105,000 metric tonnes of U.S. corn was viewed as routine business and had little impact.

 

Buyers on Wednesday included Iowa Grain buying 2,500 March, Fimat selling 2,000 March, O'Connor buying 1,000 March and ADM buying 500 March.

 

Sellers Wednesday included Calyon Financial selling 1,000 March, the RIS Division of Man Financial Services selling 1,500 March, the Refco Division of Man Financial selling 1,800 March, FC Stonnee selling 600 March and Cargill selling 500 March.

 

Oat futures settled unchanged to lower, with the March future falling 1 1/2 cents to US$2.03 1/2 per bushel. The December contract went off the board 1 1/2 cents lower at US$2.19 per bushel.

 

Ethanol futures finished mostly higher. The most-active April contract did not trade but ended 1/2 cent higher at US$1.94 1/2 per gallon.

 

On Thursday, the U.S. Department of Agriculture is scheduled to release the weekly export sales for the week ending Dec. 8 at 7:30 a.m. CST (1330 GMT). Analysts expect sales between 600,000 and 800,000 metric tonnes. Sales in the week ended Dec. 1 were 694,300 metric tonnes.