January 4, 2006

 

CBOT Corn Review on Tuesday: Finishes stronger on funds, spillover

 

 

Corn futures at the Chicago Board of Trade settled higher Tuesday as a combination of factors helped most-active March finish at its highest level since last fall.

 

March corn rallied 4 1/4 cents to US$2.20 per bushel, after reaching a high of US$2.21. May corn rose 3 1/2 cents to US$2.28 1/2, and July gained 4 cents to 2.36 per bushel.

 

Spillover buying from the soy-complex market and precious metals helped futures move to the upside in early trading with concerns over lingering dry conditions in Argentina, a competitor to U.S. in world corn export markets, also providing a boost, floor traders said.

 

March soybeans gained 15 cents to US$6.28 1/2.

 

Technical buying, linked to heavy fund buying, also provided support as the market moved through resistance around US$2.17 in March and moved toward US$2.20, its next objective on daily charts, a floor analyst said.

 

Commodity fund buying was estimated at 14,000 contracts.

 

Technically based fund buying and spillover from a number of markets helped underpin corn futures, said Don Roose, president of U.S. Commodities in West Des Moines, Iowa. The corn market is also beginning to focus on the hot temperatures in Argentina with the pollination of the crop soon to begin, he added.

 

Mainly dry conditions are forecast for much of Argentina through Thursday with temperatures possibly reaching 100 degrees Fahrenheit by Thursday. Dry conditions are expected to continue with only isolated showers and thunder showers expected through the coming weekend, DTN Meteorlogix weather said.

 

Near the close, March corn pushed past technical resistance around the US$2.20 level as local traders helped push prices higher, with spillover support from a late surge in wheat adding to the late strength, a floor analyst said. March wheat jumped 6 3/4 cents to US$3.46 per bushel.

 

March corn settled at its highest level since Oct. 3.

 

On technical charts, March corn finished above its 100-day moving average of US$2.16 1/4.

 

Buyers on Tuesday included Calyon Financial buying 1,500 March, Fimat buying 9,500 March, Goldenberg-Hehmeyer buying 1,700 March, Man Financial buying 600 March and 200 July, and JP Morgan buying 900 March.

 

Sellers Tuesday included Cargill selling 800 May, FC Stonnee selling 500 March and 100 July, ABN Amro selling 1,200 March, Iowa Grain selling 500 March, Man Financial selling 500 March, O'Connor selling 500 March, UBS selling 1,000 March and JP Morgan selling 1,000 July.

 

Oat futures settled moderately higher, benefiting from spillover strength from wheat and corn, sources said. The March contract settled 4 3/4 cents higher to US$1.99 3/4 cents per bushel.

 

Ethanol futures ended mostly higher. The most-active April contract gained 3 cents, finishing at US$2.13 per gallon.