February 5, 2008

 

CBOT Corn Review on Monday: Higher on soy complex rally, speculative buys

 

 

Chicago Board of Trade corn futures ended sharply higher and near session highs Monday, boosted by strong gains in soybeans and the continued strength in U.S. wheat markets, analysts said.

 

March corn settled 10 cents higher at US$5.10 1/2 per bushel, and December jumped 14 cents to US$5.33. March soybeans rallied 38 3/4 cents to US$13.26 per bushel.

 

"It was all about the soy complex Monday which helped boost corn," said Brad Dennis, a broker/analyst at Bump Investor Services. Soyoil rallied sharply to the upside, making new all-time highs. Soybeans rallied, and when soymeal followed, corn rallied to its highs, said Dennis.

 

A move to limit-up in CBOT wheat futures at the close added strength. CBOT March wheat ended 30 cents higher at US$9.73 per bushel. MGE spring wheat futures continued their assault on the record books, settling 30 cents at US$14.33, the highest price ever recorded for any wheat future.

 

Strong speculative buying was also behind the rally, a commission house analyst said. Commodity fund buying was estimated at 15,000 contracts as "the strategy of buying agricultural commodities is working for the funds," the commission house analyst said.

 

Corn also derived support from stronger crude oil prices, though its gains faded near the close, the commission house analyst added.

 

Market direction Tuesday will be set by what happens overnight but if things remain quiet, corn could see additional fund buying, an analyst said.

 

On daily technical charts, March settled at its highest level since Jan. 14 and remained above its major moving averages. The 14-day relative strength index in March ended at 67.16.

 

In options trading, JP Morgan sold 1,500 March US$5.30 calls and 1,500 March US$4.80 puts. Tenco bought 2,000 December US$8.00 calls.

 

Oat futures settled sharply higher as strong fund buying and spillover from wheat and corn boosted prices, an analyst said.

 

March oats surged 12 1/2 cents to US$3.35 1/2 per bushel, and December rallied to a new life-of-contract high.

 

Ethanol futures closed mixed. February ethanol ended .003 cent lower at US$2.15 per gallon while March closed 2.2 cents higher at US$2.12.