February 10, 2007

 

CBOT Corn Review on Friday: Higher on speculative, technical buying

 

 

Chicago Board of Trade corn futures ended higher across the board Friday, extending Thursday's recovery bounce on speculative-led technical buying.

 

March corn ended 6 1/2 cents higher at US$4.06 1/4 per bushel, and December finished 2 3/4 cents higher at US$3.99 1/4.

 

The supportive theme was consistent for most of the day, with buying accelerating once futures eclipsed resistance at recent highs, analysts said.

 

The absence of any surprises in the U.S. Department of Agriculture's supply and demand report put the focus back on technical objectives, with short covering and old-/new-crop spreading featured, analysts added.

 

Nearby contracts rallied to their higher levels since late January, managing to filter back into the middle of a monthlong trading range. The market has found a saturation point that adequately reflects current fundamental outlooks, as traders await fresh news to provide directives, traders added.

 

Otherwise, the exhaustion of selling pressure served as a spark to encourage shorts to cover positions heading into the weekend, traders said.

 

The USDA estimated ending stocks at 752 million bushels, unchanged from January. The average of analysts estimates were 762 million bushels. The world carryout was raised 1.51 million metric tonnes to 87.95 million, with Argentine production raised 2 million metric tonnes to 21 million and Brazil production increased by 4 million metric tonnes to 46 million.

 

In pit trades, Tenco bought 1,600 December and 400 March, Fimat bought 400 December, Fortis bought 1,600 March, Man Financial bought 400 March, Rand Financial bought 700 December and RJ O'Brien bought 500 March. Speculative fund buying is estimated near 6,000 contracts.

 

JP Morgan sold 800 December, Fimat sold 600 March, Rand Financial sold 500 July and UBS Securities sold 400 December.

 

Day session volume on the e-CBOT platform was 151,875 contracts.

 

CBOT oat futures higher, benefiting from spillover strength from other grains and buying attributed to oversold conditions, analysts said.

 

Otherwise, the market continued its recent trend, with speculative liquidation weighing on the March contract and speculative fund buying supporting the new-crop December futures.

 

March oats closed 1/2 cent higher at US$2.50 1/2 per bushel and December ended 2 1/2 cents higher at US$2.52.

 

Ethanol futures ended higher, with the March contract settling 0.030 higher at US$2.055, and the April contract settling 0.002 higher at US$2.020.