January 25, 2006

 

CBOT Corn Review on Tuesday: Higher on technicals,fund short covering

 

 

Corn futures traded at the Chicago Board of Trade settled moderately higher Tuesday, boosted by technical buying while fund short covering helped extend early gains, sources said.

 

March corn jumped 5 cents to US$2.13 1/4 per bushel; May corn also gained 5 cents, to US$2.23 1/4; and July corn finished 4 3/4 cents higher at US$2.32.

 

Not a lot of fresh news was out Tuesday, a floor analyst said. But there was small buying interest and a lack of selling early in the session. The lack of selling helped March move through overhead resistance at the 40-day and 50-day moving averages and the funds came in and covered their short positions, he added.

 

Commodity fund buying was estimated at 15,000 contracts on the day.

 

Some traders cited the growth in open interest over the past several trading days as a possible reason for the rally. Open interest keeps going up despite the lack of fresh news and little price volatility, a floor trader said. The CBOT reported corn open interest set a record Monday at 886,804 contracts.

 

March corn traded in a 5 3/4-cent range Tuesday, the widest range the contract has had in 2006.

 

On technical charts, March corn closed above its 40-day, 50-day and 100-day moving averages.

 

Buyers on Tuesday included ABN Amro, which bought 800 March; Calyon Financial bought 1,000 March; JP Morgan bought 400 July and 1,000 December and 500 March; Fimat bought 2,000 March and 700 May; Man Financial bought 400 March; and Tenco bought 500 December and 400 March.

 

Sellers Tuesday included FC Stonnee, which sold 200 July; Goldenberg-Hehmeyer sold 200 March; Merrill Lynch sold 400 March; Rosenthal sold 400 December; and Tenco sold 200 March, 200 May and 200 December.

 

Oat futures ended unchanged to higher with the nearby months supported by the firm tonnee in corn and wheat, sources said. The March contract settled 1 cent higher to US$1.90 3/4.

 

Ethanol futures ended mixed. The April contract declined 1 1/2 cents and settled at US$2.40 per gallon.