December 8, 2005

 

CBOT Corn Review on Wednesday: Down on fund sales, spillover weakness

 

 

Corn futures at the Chicago Board of Trade ended lower Wednesday, but above session lows reached late as fund selling and spillover weakness from the soy complex and wheat markets added to the negative tonnee, sources said.

 

December corn settled 3 3/4 cents lower at US$1.87 per bushel, March fell 3 1/4 cents to US$2.01, and May declined 3 1/2 cents to US$2.09 1/2 per bushel.

 

The funds pressed the market today, a commission house broker said, and as a result the market acted heavy, with little fresh news to offset the selling in a otherwise featureless session.

 

Commodity fund selling was estimated at 5,500 contracts.

 

In addition, weaker soybean and wheat futures also cast a negative tonnee across the trading floor, as larger than expected Canadian canola and wheat production helped lead those markets lower, sources said. January soybeans, which at one point held double digit losses, fell 5 cents to US$5.59, with March wheat losing 2 1/2 cents to US$3.13 1/4.

 

After sliding to the lows of the session late, with March at its contract low, corn staged a slight recovery heading into the close on mild short covering, a floor trader said.

 

Market participants noted that activity was slower than in previous sessions as the market waits for Friday's U.S. Department of Agriculture supply/demand report for clues to future price direction.

 

In a survey of 13 analysts conducted by Dow Jones, the average analyst estimate of corn ending stocks was 2.339 billion bushels, slightly higher than the 2.319 billion bushels estimated by the USDA in November.

 

Continued firmness in the cash market had little impact as the ongoing lack of export sales overhangs the market, a floor analyst said.

 

Buyers on Wednesday included Calyon Financial buying 1,000 March, Fimat buying 800 March, ABN Amro buying 700 March, and ADM buying 200 March.

 

Sellers Wednesday included Man Investor Services selling 600 March, R.J. O'Brien selling 800 March, Rand Financial selling 1,000 March, the Refco division of Man Financial selling 700 May and 2,000 March and Tenco selling 1,300 and 500 July.

 

Oat futures ended at unchanged levels despite a slightly higher Canadian Oat production estimate. The March future finished unchanged at US$1.95 per bushel.

 

Ethanol futures settled higher with the January contract gaining 3 cents to US$1.91 1/2 cents per gallon.

 

On Thursday, the USDA is scheduled to release the weekly export sales for the week ended Dec. 1 at 7:30 CST (1330 GMT). Analysts expect corn sales between 500,000-700,000 metric tonnes.