February 9, 2008

 

CBOT Corn Review on Friday: Higher, but profit-taking trims gains

 

 

Chicago Board of Trade corn futures settled higher in choppy activity on Friday, but nearer session lows as a sell-off in soybean futures and profit-taking ahead of the weekend trimmed advances, analysts said.

 

March corn, which traded 19 1/2 cents higher at one point in the session, settled 8 1/2 cents higher at US$5.08, with Dec settling 7 1/2 cents higher at US$5.30.

 

Futures rallied to the upside on spillover from sharp gains in soybeans and another move to limit-up levels and new all-time highs in wheat futures.

 

"Corn followed wheat higher with strength in crude oil adding to the gains," said Dan Cekander, an analyst at Newedge USA.

 

U.S. wheat futures settled limit up, 30 cents higher at all three U.S. exchanges, with new all-time highs set in the nearby months.

 

After the volatility of the past several days, participants wanted to even up their positions before the weekend, a trader said. March soybeans ended 7 1/2 cents higher at US$13.39 per bushel, after rallying to a new contract high of US$13.74 1/2 per bushel. Nearby crude oil futures were trading over US$3.00 per barrel higher when corn closed.

 

Speculative buying also added support with "participants interested in buying commodities as an asset class," an analyst said.

 

In open auction trading, commodity fund buying was estimated at 6,000 contracts.

 

The market had little reaction to the U.S. Department of Agriculture's February supply/demand report, with corn continuing to move higher on the strength in other markets, a commission house analyst said.

 

The USDA estimated 2007-08 corn ending stocks at 1.438 billion bushels, unchanged from its January report. Analysts had been expecting a small reduction in ending stocks based on the strong pace of export sales.

 

Price direction Monday will key off of what happens to wheat Sunday night as corn continues to be a follower of wheat, the commission house analyst said.

 

In options trading, Tenco bought 800 December US$5.30 calls and sold 800 December US$6.50 calls and 800 December US$4.70 calls.

 

Oat futures settled with strong gains as the oat strength was "all about wheat," an analyst said. New life-of-contract highs were set across the board with the May contract establishing a new all-time for any May contract.

 

March oats settled 9 1/4 cents higher at US$3.50 per bushel and May finished 10 cents higher at US$3.60, after trading as high as US$3.64.

 

Ethanol futures ended higher. March ethanol settled up 2 cents at US$2.11 per gallon and April rose 2.5 cents to US$2.11.