January 18, 2006

 

CBOT Corn Review on Tuesday: Declines on wheat, technicals, funds

 

 

Corn futures traded at the Chicago Board of Trade settled moderately lower Tuesday, pulled down by spillover liquidation from wheat futures along with technical and fund selling, sources said.

 

March corn settled 4 3/4 cents lower at US$2.08 3/4 per bushel, May corn also fell 4 3/4 cents to US$2.18 1/4, and July corn declined 4 1/4 cents to US$2.27 1/4.

 

The market is now focusing on the fundamentals as it looks like last week's index fund buying has run its course, said Steve Bruce, a broker with Man Financial. There's no rush to buy U.S. corn, right now it's a buyer's market, with buyers in no hurry, he added.

 

Late last week, the U.S. Department of Agriculture estimated the 2005 crop will be the second-largest ever along with large quarterly and ending stocks data.

 

"It was a low volume selling type of session with nothing on the other side to support it," a floor analyst said.

 

Commodity fund selling was estimated at 5,500 contracts.

 

Good rains over the weekend in Argentina added early pressure as recent concerns over hot and dry weather were alleviated, sources said.

 

On technical charts, March corn settled right at its 50-day moving average.

 

In addition, March declined to its lowest intraday level since Dec 21. and has declined 11 1/4 cents since settling at US$2.20 on Jan. 3.

 

Export inspections were released during the session by the USDA and were 33.649 million bushels, above the 24 million to 30 million bushels expected by analysts.

 

Buyers on Tuesday included Cargill, which bought 1,000 March; Calyon Financial, which bought 1,000 March; Rand Financial, which bought 300 March; Man Financial, which bought 300 May; Fimat, which bought 300 March; and Tenco, which bought 200 May and 200 December.

 

Sellers Tuesday included Calyon Financial, which sold 1,500 March; JP Morgan, which sold 1,000 March; Goldenberg-Hehmeyer, which sold 800 March; O'Connor, which sold 600 March; Rosenthal, which sold 1,000 March; UBS, which sold 500 March; and Rand, which sold 500 March.

 

Oat futures settled with moderate losses as spillover from wheat and corn futures pressured oats, sources said. The March contract fell 4 1/2 cents at US$1.85 3/4 per bushel.

 

Ethanol futures ended higher. The April contract didn't trade and finished 7 1/2 cents higher at US$2.37 1/2 per gallon.