February 20, 2008

 

CBOT Corn Review on Tuesday: Ends higher on crude oil, soy surge

 

 

Chicago Board of Trade corn futures settled higher Tuesday, boosted by a backdrop of bullish outside markets and spillover from sharply higher soybean futures, analysts said.

 

March corn settled 5 1/4 cents higher at US$5.20 per bushel and Dec gained 7 cents to US$5.45.

 

The stronger outside commodity markets provided support for corn futures, said Bill Nelson, associate vice president at AG Edwards & Sons. Crude oil futures surged and March traded over the US$100 per barrel level and was up over US$4 per barrel when corn closed. Gold futures rallied sharply with the April contract ending US$23.70 per ounce higher at US$929.80.

 

Soybean and soyoil futures established all-time highs and corn followed soybeans as it continues to try and retain acres this spring, he said.

 

May soybeans settled 26 1/2 cents higher at US$14.17 3/4 and March soyoil jumped 164 points to 60.21 cents per pound.

 

Corn was also underpinned by a supportive technical picture with speculative technical buying boosting prices near the opening of day session trading, a commission house analyst said.

 

The market also received a boost from news that China exported only 30,000 metric tonnes of corn in January, "which shows that it is probably not going to be a significant corn exporter on the world market," said Nelson.

 

News ahead of the opening that South Korea bought 165,000 tonnes of optional origin corn for delivery in the 2007-08 marketing year also provided support, a commission house analyst said.

 

On daily open auction technical charts, March settled at another new high close and remained well above its major moving averages.

 

In open auction trading, commodity fund buying was estimated at 3,000 contracts.

 

Corn will be watching the outside markets Wednesday, particularly energy for direction after the steep gains set Tuesday, a trader said. The market will also be following the soy complex market after its gains with participants also waiting on the U.S. Department of Agriculture's Outlook Forum Thursday and Friday, the trader added.

 

In options trading, ADM bought 2,500 July US$4.40 calls and sold 2,500 December US$4.40 calls. FC Stonnee bought 2,000 March US$5.40 puts.

 

Oat futures settled sharply higher with December oats setting a all-time high on spillover buying from the rest of the floor, a trader said. December oats traded as high as US$4.03 per bushel, above the high of US$3.95 per bushel set Friday. Light commercial selling helped cap the gains and spread trading was active as participants rolled out of March and into May, the trader said.

 

March oats settled 10 cents higher at US$3.68 per bushel and Dec rose 7 3/4 cents to US$4.02 3/4.

 

Ethanol futures ended higher. March ethanol settled up 7 cents to US$2.303 per gallon and April gained 3.9 cents to US$2.279.