November 17, 2005

 

CBOT Corn Review on Wednesday: Down; new lows on fund selling, weak soy

 

 

Corn futures traded at the Chicago Board of Trade settled moderately lower Wednesday, declining to new contract lows in several months on fund selling, spillover weakness from soybeans and mounting concerns over bird flu worries, sources said.

 

December corn fell 3 cents to US$1.92 3/4 per bushel, March declined 3 1/4 cents to US$2.06 3/4 and May corn lost 2 1/2 cents to US$2.15 1/2 per bushel. All three months made new life-of-contract lows Wednesday.

 

"The market was weak on the lack of fresh fundamental inputs and fund selling, with technical selling adding to the losses," a commission house broker said.

 

In addition, spillover weakness from soybeans and news that China reported three people being infected with bird flu and that two of them died from the disease added to the poor tone, he said. Growing concerns the avian influenza outbreak in China may be worse than previously anticipated limited buying interest as well.

 

Soybean futures finished sharply lower with technical selling providing pressure, sources said. The January future dropped 15 1/2 cents to US$5.76 3/4. December soymeal future settled sharply lower as well, losing US$6.80 per tonne to US$173.40.

 

Both corn and soymeal are key feed ingredients to the poultry industry with any decline in demand adding to corn's large ending stocks.

 

Fund selling accelerated during the session with commodity fund selling estimated at 10,000 contracts.

 

Buyers on Wednesday included ABN Amro buying 800 March, Fimat buying 700 December, JP Morgan buying 500 March and Citigroup buying 300 December and 100 May.

 

Sellers Wednesday included R.J. O'Brien selling 2,000 December, Fimat selling 1,200 December and 1,100 March, O'Connor selling 1,000 March, ABN Amro selling 1,000 March, and Man Financial selling 500 December and 500 March.

 

In spread trading, Calyon Financial spread 10,000 December-March, Fimat spread 3,000 March-December and R.J. O'Brien spread 2,000 December-March.

 

Oat futures mixed with the December contract slipping 1/2 cent to US$1.64 3/4 per bushel.

 

Ethanol futures settled mostly higher. The January contract did not trade and finished 2 1/2 cents higher at US$1.93 per gallon.

 

On Thursday, the U.S. Department of Agriculture is scheduled to release the weekly export sales report. Analysts expect corn sales between 800,000-1,000,000 metric tonnes for the week ended November 10.