February 17, 2007

 

CBOT Corn Review on Friday: Rallies higher on forecast, technical buying

 

 

Chicago Board of Trade corn futures finished with strong gains Friday, with nearby March reaching its highest level since mid-January as a bullish long-term weather forecast from a private weather firm boosted prices, sources said.

 

March corn settled 9 1/2 cents higher at US$4.17 per bushel and May also gained 9 1/2 cents to US$4.29 1/2.

 

New crop December scored a new life-of-contract high.

 

The market's reaction to the forecast "shows how hypersensitive it is to any potential weather problem," said Vic Lespinasse of AG Edwards & Sons.

 

Technical and fund buying added to the gains, sources said.

 

The rally kept some people interested in selling on the sidelines, which helped add to the advances, Lespinasse said.

 

Stronger-than-expected weekly export sales added to the firm tonnee, a trader noted.

 

The U.S. Department of Agriculture reported weekly corn sales were 1.389 million metric tonnes, well above estimates of 700,000-1.0 million tonnes.

 

It is a long weekend and people didn't want to be short ahead of it, a floor trader said.

 

"We'll see if there is anything to this rally Tuesday," a commission house trader said.

 

The CBOT is closed Monday in observance of Presidents Day.

 

On day session open auction technical charts, March corn didn't make a new contract high but settled at a new high close.

 

Buyers on Friday included Fimat, which bought 1,000 December, and UBS, which bought 1,000 July and 500 December.

 

Sellers Friday included JP Morgan, which sold 1,000 July, 800 March and 1,200 December and UBS, which sold 500 July and 400 December.

 

Commodity fund buying was estimated at 6,000 contracts.

 

Oat futures ended higher as spillover buying from the rest of the floor boosted prices, a floor analyst said.

 

March oats jumped 5 cents to US$2.42 1/2 per bushel and May settled 3 1/4 cents higher to US$2.49 1/2.

 

Ethanol futures settled modestly higher in thin trade. The March contract gained 1.8 cents to US$2.098 per gallon. The April contract settled 3.5 cents higher at US$2.055 per gallon.

 

Friday afternoon the Commodity Futures Trading Commission is scheduled to release the weekly commitment of traders report for the period ending Feb. 13.