Spreads to other grains. Remember if there is a speculator liquidation of grains and food, it's happening against the backdrop of extremely low inventories and supply of food worldwide, PLUS the Fed's and BOJ's avert monetizing. Specs are already down to small long positions prior to this: 125,556 grains subgroup. An interesting brew!
Reuters
CBOT corn finally feels pressure of sharp soy drop
Thursday May 27, 5:05 pm ET
CHICAGO, May 27 (Reuters) - Chicago Board of Trade corn futures ended lower on Thursday after spending most of the session higher on U.S. crop concerns due to heavy rains and flooding in parts of the Midwest this week, traders said.
A 50-cent limit move down in July soybeans (SX4) and an 11- to 12-cent drop in Chicago wheat was enough to weigh on corn by the last 45 minutes of trade.
"It just succumbed to the pressure of the rest of the floor," one CBOT corn broker said.
By the close, CBOT corn futures were 1 to 2-1/4 cents per bushel lower. Old-crop July (CN4) was down 2 at $2.98-3/4 and new-crop December (CZ4) settled 2-1/4 weaker at $2.91-1/4.
Less-than-ideal crop conditions this week had analysts backing off their 2004 U.S. corn production estimates slightly, even though most still expect a record crop of over 10 billion bushels. But world and U.S. demand for corn remains strong, so any concerns about production gets the attention of traders and boosts prices.
"We could lose acres, we could lose yields -- indicating use is going over production," one floor trader said.
There was some corn/wheat and corn/soybean spreading, which underpinned corn early. But overall futures volume was moderate as the focus remains on soybeans, traders said.
Estimated corn volume was 74,517 futures and 28,780 options.
Net options trade was bullish to futures, featuring call buying and call spreading.
Commodity funds bought roughly 2,000 lots. Commercials were sellers amid light farmer-hedge pressure as country movement picked up, traders said. Cargill Inc sold 1,500 December and FC Stone sold 1,000 December.
Support also stemmed from a strong weekly export number. The U.S. Department of Agriculture said Thursday that last week's U.S. corn sales reached 1,377,400 tonnes (old-crop and new-crop combined), above trade estimates for 700,000 to 900,000 tonnes.
USDA also reported on Thursday the sale of 55,000 tonnes of U.S. corn to an unknown destination for 2003/04 delivery and a sale of 110,000 tonnes to an unknown destination for 2004/05 (new-crop) delivery that occurred within the past day.
South Korea said on Thursday it bought 50,000 tonnes of optional-origin corn, with the United States, South America and China listed as possible sources.
But the Philippines canceled plans to seek 340,000 tonnes of corn on June 3.
CBOT oats ended 5-3/4 to 6-3/4 cents per bushel weaker, following the drop in soybeans. July (ON4) was 5-3/4 down at $1.47-1/2. Volume was moderate, estimated at 1,416 futures and 178 options. |
