January 28, 2006

 

CBOT Corn Review on Friday: Modest gains on funds, soy spillover

 

 

Corn futures traded at the Chicago Board of Trade ended higher Friday, extending their recent rally to a fifth straight day as heavy fund buying, spillover from sharply higher soybeans based on weather concerns in Argentina and technical buying provided support, floor sources said.

 

March corn settled 1 3/4 cents higher to US$2.18 3/4 per bushel, May corn also ended up 1 3/4 cents to US$2.28 1/2, and July corn finished up 1 3/4 cents at US$2.37 1/2.

 

For the week, March corn gained 13 3/4 cents.

 

Strong fund buying led the way higher, continuing the recent pattern, said Vic Lespinasse, with A.G. Edwards & Sons. Recent news that additional money would be allocated to commodity futures has increased recent enthusiasm, he added.

 

Deutsche Bank recently announced that it plans to list a commodity linked exchange traded fund, with its underlying components including wheat and corn futures.

 

The heavy fund buying occurred through much of the morning before slowing around midday, with futures slipping to trade in negative territory. However, futures rebounded as additional fund buying surfaced and soybean futures extended their advances, a floor analyst said.

 

Commodity fund buying was estimated at 20,000 contracts Friday with one floor analyst estimating net fund buying at 45,000 contracts for the period of Wednesday through Friday.

 

Spillover support from stronger soybean futures added to the firm tonnee, with March soybeans jumping 16 1/4 cents to US$5.89 1/4. Mostly dry weather is expected over the next several days in Argentina with temperatures expected in the uppoer 80s F to upper 90s F, DTN Meteorlogix weather said.

 

On technical charts, March corn moved through resistance at US$2.17 1/4 and 2.18 1/4 on the opening, but was unable to pierce US$2.21, the January high.

 

Buyers on Friday included FC Stonnee, which bought 1,000 March, ABN Amro bought 1,500 March, Calyon Financial bought 1,500 March, JP Morgan bought 1,000 March and 1,000 December, Goldenberg-Hehmeyer bought 2,000 March, O'Connor bought 500 March and 500 December, Rand bought 1,000 March, the Refco division of Man Financial bought 800 March and 1,000 July, Tenco bought 3,000 March and Deutsche Bank bought 3,500 December.

 

Sellers Friday included Cargill, which sold 3,000 May and 1,700 March, Fimat sold 1,000 December and 300 March, Man Financial sold 300 July, R.J. O'Brien sold 500 December and 300 July, the Refco division of Man Financial sold 1,000 March and Tenco sold 1,000 March.

 

Oat futures settled modestly higher with the March up 1 1/2 cents at US$1.90 3/4 per bushel.

 

Ethanol futures ended mixed. The April contract did not trade and ended 1 1/2 cents higher at US$2.41 per gallon.

 

Later Friday, the Commodity Futures Trading Commission is scheduled to release the commitment of traders reports as of Tuesday, Jan. 24.

 

On Monday, the U.S. Department of Agriculture is scheduled to release the weekly export inspections report at 10:00 a.m. CST.