January 26, 2008

 

CBOT Corn Review on Friday: Settles firm but off highs as equities dip

 

 

Chicago Board of Trade corn futures settled sharply higher Friday but well off levels established early in choppy activity.

 

March corn settled 9 cents higher at US$4.98 1/4 per bushel, after trading as high as US$5.04 1/2, and December ended up 7 1/4 cents at US$5.09 3/4.

 

Follow-through buying from the sharp gains set in the previous session and stronger prices in overnight activity helped corn trade to the upside, a commission house analyst said.

 

Speculative buying and higher energy and precious metals futures prices also provided spillover support, the analyst said.

 

In open auction trading, commodity fund buying was estimated at 8,000 contracts.

 

However, corn was "caught in market cross-currents," said Don Roose, president of U.S. Commodities in West Des Moines, Iowa. Weekly corn export sales continue to show price rationing of demand is not yet occurring but a decline in equities to negative levels trimmed the gains, he said.

 

The U.S. Department of Agriculture reported weekly corn export sales were 1.715 million metric tonnes, in line with the 1.0 million to 2.0 million tonnes expected by analysts.

 

A pullback in energy and metal futures also carried over into corn, a trader said. Both crude oil and gold futures settled higher but down from levels established earlier in the session.

 

Corn's price direction Monday will depend on what happens to world equity prices Sunday night, South American weather and "whatever else turns up over the weekend," the trader said.

 

On daily technical charts, electronically traded March corn settled above its 10-day moving average for the first time since last Friday.

 

In options trading, MF Global bought 2,000 March US$4.90 puts, bought 500 March US$4.60 puts and sold 2,500 December US$8.00 calls.

 

Oat futures ended higher but down from the levels set earlier in the session. Spillover from corn futures helped oats rally but the inability of corn to remain at session highs led to light selling in oats, an analyst said.

 

March oats settled 3 3/4 cents higher at US$3.20 1/4 per bushel.

 

Ethanol futures closed higher. February ethanol rose 3.2 cents to US$2.209 per gallon while March closed up 2 cents at US$2.125.