November 3, 2005

 

CBOT Corn Review on Wednesday: Slips lower on lack of fresh news

 

 

Corn futures at the Chicago Board of Trade settled modestly lower on Wednesday, continuing the recent pattern of low volatility within narrow price ranges. The continued lack of fresh demand amid the ongoing harvest of what is expected to be the second largest U.S. crop on record kept futures on the defensive, sources said.

 

December corn fell 3/4 cent to US$1.96 per bushel, after setting a new contract low overnight of US$1.95 1/2. March corn also fell 3/4 cent to US$2.10, and May corn fell 1 1/4 cents to US$2.18 per bushel. March also set a new contract low in overnight trading, while May reached a new low of US$2.17 3/4 in open outcry activity.

 

"There was just no bounce in the market today," a commercial broker said. The market is just drifting slowly lower as there continues to be no pressing reason to buy it right now, he added.

 

Tuesday afternoon's crop production estimate from private trading firm FC Stonnee didn't have much impact either way, a trader said. Stonnee estimated corn production at 11.079 billion bushels, above the 10.857 billion bushels estimated by the U.S. Department of Agriculture in October.

 

In addition, Stonnee pegged the yield at 149.0 bushels per acre, above the 146.1-bushel yield estimate in October from the USDA.

 

"With the late season crop ratings indicating improvement in conditions, the number is not that big of a surprise, a floor source said.

 

The USDA is scheduled to release the November crop production and supply/demand reports on Nov. 10 with some market analysts expecting the recent price pattern to continue until the report is released.

 

Good harvest weather is predicted over the next several days across much of the U.S. Midwest, according to DTN Meteorlogix weather, allowing farmers to continue cutting their crops.

 

Buyers on Wednesday included Citigroup buying 2,000 December, Tenco buying 500 March and 200 July, Refco buying 400 March, and Cargill buying 700 March and 100 December.

 

Sellers Wednesday included Fimat selling 2,300 December, Cargill selling 200 December, Man Financial selling 300 March and 100 May, Rand Financial selling 500 December, and Refco selling 200 December and 200 March.

 

Commodity fund buying was estimated at 1,000 contracts.

 

Buyers in options included Fimat buying 1,000 March US$2.20 calls and selling 1,000 March US$2.40 calls.

 

Oat futures settled at higher levels with the December contract gaining 1 1/4 cents to US$1.62 per bushel.

 

Ethanol futures ended mostly lower. The January contract didn't trade but settled 1 cent higher at US$1.91 1/2 per gallon.

 

On Thursday, the USDA is scheduled to release the weekly export sales report at 7:30 a.m. CST (1330 GMT). Analysts estimate sales at 800,000-1.2 million metric tonnes for the week ended Oct. 27. Sales for the week ended Oct. 20 totaled 718,400 metric tonnes.