December 28, 2006

 

CBOT Corn Review on Wednesday: Ends lower on setback from prior gains

 

 

Chicago Board of Trade corn futures ended Wednesday's session posting modest declines, as the market staged a minor price setback from previous gains.

 

March corn ended 1 1/4 cents lower at US$3.86 3/4 cents per bushel, and May dropped 1/2-cent to US$3.94 3/4.

 

Light profit-taking from Tuesday coupled with the inability of futures to challenge overhead technical resistance in prior sessions set the stage for the lower tonnee, analysts said.

 

A quiet news front provided little direction for prices, with the absence of underpinning speculative fund buying leaving futures in a consolidative mode, a CBOT floor analyst says.

 

Otherwise, futures had few directives, with technical action a non-event and the quiet news front kept many participants sidelined in thin holiday trade, analysts added.

 

Nevertheless, overhead technical resistance continued to limit upside potential, with bullish long-range demand prospects associated with the expansion of corn-based ethanol remained an underpinning theme to keep a floor beneath prices, analysts said.

 

The DTN Meteorlogix weather forecast said South Africa's Maize Triangle had rains of up to one inch during Tuesday. Additional showers will bring up to one-and-one-half inches to finish out the week, followed by yet more scattered showers during the first part of next week. Crop weather remains favorable in South Africa.

 

As a reminder, U.S. Department of Agriculture's weekly export sales report, normally released on Thursday, will be delayed until Friday 7:30 a.m. CST due Monday's Christmas Day holiday.

 

In pit trades, ADM Investor Services bought 400 March and 300 December, UBS Securities bought 600 December, Fimat bought 700 July, Man Financial bought 300 March and JP Morgan bought 300 December. Speculative fund selling was estimated at 2,000 contracts.

 

Rand Financial sold 1,000 July, UBS Securities sold 600 March and 600 July, Citigroup and JP Morgan each sold 300 July.

 

Advantage sold 4,000 March US$3.65 puts.

 

CBOT oat futures ended mixed in light trade, sources said. There was commission house buying and selling, along with fund buying in the March contract, a trader noted. March oats settled 1/2 cent lower at US$2.76 1/4 per bushel and May ended up 3/4 cent at US$2.80 1/2.

 

Ethanol futures ended higher. The January contract ended up 0.063 at US$2.426 per gallon. The February contract moved 0.018 lower at US$2.300.