February 15, 2008

 

CBOT Corn Review on Thursday: Market up; rallies on wheat, soy surge

 

 

Chicago Board of Trade corn futures settled with strong gains Thursday on spillover strength from a surge in U.S. wheat and soybeans.

 

March corn settled 14 cents higher at US$5.11 per bushel, and December gained 13 cents to US$5.32 1/4.

 

"Corn was pulled higher by the rally in wheat and in the soy complex," said Vic Lespinasse, an analyst at Illinois Grain. There wasn't much fresh news out to influence corn in either direction and corn remained in its recent role as a follower of other markets, said Lespinasse.

 

CBOT wheat futures jumped 40 1/2 cents to US$10.32 per bushel, and March soybeans rallied 39 1/2 cents to US$13.68. MGE March spring wheat futures continued to set new all-time high prices. March spring wheat jumped90 cents higher to US$18.53 per bushel.

 

The market also drew support from stronger crude oil prices, which were trading around US$1.90 higher per barrel when corn closed. In addition, corn was underpinned by a strong rally in soyoil, which set a new all-time high as a surge in vegetable oil prices in Asia and concerns about damage to China's rapeseed crop after recent severe weather.

 

March soybean oil rose 190 points to 58.16 cents per pound.

 

Weekly U.S. corn export sales were released ahead of the start of day session trading but were within analyst estimates and had little impact on the market, a commission house analyst said. The U.S. Department of Agriculture reported weekly corn export sales were 980,400 metric tonnes for the week ended Feb. 7, near the upper end of the 550,000 to 1.0 million metric tonnes expected by analysts. A trader called the sales "solid." Included in the total were sales of 48,000 tonnes for delivery in the 2008-09 marketing year.

 

As the other grains move higher, corn rallies as well as it continues to fight for acreage this spring, the commission house analyst said.

 

Price direction Friday will depend on the direction in wheat as well as what speculative traders want to do before the long Presidents Day weekend, a trader said.

 

On daily open auction technical charts, March gapped open higher and settled above its major moving averages and at its highest level since Jan. 14.

 

In open auction trading, commodity fund buying was estimated at 7,000 contracts.

 

In options trading, Tenco bought 5,000 December US$5.30 calls and sold 5,000 December US$6.40 calls and sold 5,000 December US$4.80 puts.

 

Oat futures settled sharply higher, pushed by spillover from the rest of the grain markets, a commission house analyst said. December oats set a new all-time high for a December contract at US$3.92 per bushel, eclipsing the old record set in 1988.

 

March oats rallied 10 1/2 cents to US$3.54 1/2 per bushel.

 

Ethanol futures settled higher. March ethanol rose 2.7 cents to US$2.217 per gallon and April gained 3 cents to US$2.21.