January 5, 2006

 

CBOT Corn Review on Wednesday: Modest declines in consolidation

 

 

Corn futures at the Chicago Board of Trade ended modestly lower Wednesday as the market consolidated after Tuesday's rally, floor traders said.

 

March corn slipped 1 3/4 cents to US$2.18 1/4 per bushel, May corn declined 1 1/2 cents to US$2.27, and July ended down 3/4 cent to 2.35 1/4 per bushel.

 

The market consolidated its recent gains, a floor broker said. Corn has rallied steadily since the December supply/demand report and people took some light profits, he said. Large scale fund buying, a feature in Tuesday's trading, was mostly absent, he added.

 

"Recent strength has been on the back of the funds, and without the funds, the market consolidated at lower levels," said Shawn McCambridge, senior grains analyst at Prudential Financial.

 

There is a sentiment in the market that fund buying is not complete, limiting the downside, McCambridge said. Recent fundamentals don't matter with the funds supplying short-term direction, he added.

 

Spillover support from firming wheat and soybean prices helped corn recover some of its declines late in the session, with light fund buying late in the session adding support, the floor broker said.

 

On technical charts, March corn traded an inside day, with Wednesday's high and low within Tuesday's price range but remained above its 100-day moving average.

 

Buyers on Wednesday included ABN Amro, which bought 800 March, Calyon 500 March, Fimat 400 March, O'Connor 400 March and 300 July, and the Refco division of Man Financial 400 July and 200 March.

 

Sellers Wednesday included Rand Financial selling 1,000 March, Calyon 1,000 March, JP Morgan 500 March, 500 May and 400 July, Fimat 500 March, and Goldenberg-Hehmeyer 1,200 March.

 

Commodity fund selling was estimated at 1,000 contracts.

 

Oat futures ended lower with the March contract declining 2 1/2 cents to US$1.97 1/4 per bushel.

 

Ethanol futures settled mixed. The most-active April contract did not trade and ended 2 cents lower at US$2.11 per gallon.