January 31, 2007

CBOT Corn Review on Tuesday: End up on light speculative buys, commercial buys

Chicago Board of Trade corn futures ended higher Tuesday, bouncing back from earlier losses on light speculative buys and underlying commercial buying, analysts said.

March corn ended 4 3/4 cents higher at US$4.04 3/4 per bushel, and December finished 3 1/4 cents higher at US$3.97 3/4.

The exhaustion of early long liquidation pressure, scale down commercial buying and borrowed momentum from higher energy futures provided a spark to firmly plant prices in positive territory, analysts said.

A quiet news front kept attention centered on technicals and outside influences. The ability of nearby contracts to find a base in the face of early speculative selling, set the stage for the recovery, traders said. The market continues to find support on breaks, with the psychological US$4.00 per bushel level remaining a source of price support. The March futures ability to settle above that mark once again is keeping a supportive undertonnee the market, traders added.

Otherwise, activity was fairly subdued, with bullish long range fundamental outlooks, talk of the potential for added livestock feedings in the midst of a central U.S. cold wave, and the impact of higher outside markets, keeping a level of strength in prices, analysts added.

Meanwhile, the DTN Meteorlogix Weather Service forecast said Argentina is dry in the east, while western areas are getting some mostly light showers with scattered heavier rainfall. The rest of the week will be mostly dry, with temperatures climbing into the 90s Fahrenheit especially in the southwest growing areas.

Day session volume on the e-CBOT platform was 107,652 contracts.

CBOT oat futures ended mostly higher, garnering support from price strength in neighboring grain futures. The rolling of nearby March futures remained a feature, with new crop contracts continuing to find speculative interest in absence of fresh fundamental news, analysts said. March oats closed 3/4-cent higher at US$2.59 1/4 per bushel and December ended 1/2-cent higher at US$2.48 3/4.

Ethanol futures ended higher, with the February contract settling up US$0.040 at US$1.985, and the March contract settled 0.030 higher at US$1.95.