February 26, 2008

 

CBOT Corn Review on Monday: Rallies to new highs on spillover strength

 

 

Corn futures on the Chicago Board of Trade finished higher Monday, propelling to new all-time highs on speculative buying amid spillover support from soybeans and wheat futures.

 

March corn ended 11 cents higher at US$5.33 1/4, May corn settled 12 cents higher at US$5.47, and December finished 7 cents higher at US$5.57 1/4.

 

May corn had an intraday and new all-time high for a nearby contract of US$5.55 a bushel, eclipsing the previous high of US$5.54 1/2 set July 12, 1996.

 

"Corn has just followed along, watching CBOT soybean futures and Minneapolis Grain Exchange spring wheat futures for direction amid an ongoing battle for acreage in the U.S. northern Plains," said Shawn McCambridge, senior grains analyst with Prudential Bache Commodities in Chicago.

 

CBOT soybeans and MGE wheat Monday hit all-time highs on tightening supplies and strong demand. Overnight gains overseas also helped fuel corn's rally to a new all-time high, McCambridge said. "The overseas prices kind of took off, and kind of was the trigger for us," McCambridge said. "The momentum has been building in these agricultural markets. It seemed like the gains overseas just really fed into this bullish market sentiment that exists out there."

 

Otherwise, futures had little fundamental news to suggest the price rally would occur, leaving some analysts to say the gains were more technical in nature, with a push to new highs uncovering a fresh wave of buy stops.

 

Nevertheless, underlying export demand coupled with a weak U.S. dollar continues to support, but any future gains are expected to be predicated on wheat advances until a clearer picture of 2008 acreage establishes the fundamental picture for the 2008 calendar year, analysts added.

 

U.S. corn inspected for export in the week ended Feb. 21 totaled 46.628 million bushels, the U.S. Department of Agriculture reported. The inspections were within the 42 million to 48 million forecast by analysts, but they were 9.4% below the 51.464 million inspected the previous week. Year-to-date, 1.223 billion bushels have been inspected for export, up 18.6% from the 1.031 billion inspected last year at this time.

 

Meanwhile, the DTN Meteorlogix weather forecast said Argentina's central corn and soybean belt had rainfall of up to one-half inch during the past weekend. Additional scattered rains are in store for the region this week as well. This pattern will maintain favorable conditions for filling corn and soybeans, Meteorlogix said.

 

In pit trades, buyers and sellers were scattered among various commission houses, with speculative fund buying estimated at 8,000 lots.

 

March oats closed limit-up on spillover support from rallies in the neighboring markets, floor traders said. March oats closed 20 cents higher at US$4.04 per bushel, and May ended up 20 cents at US$4.15.

 

Ethanol futures rose. March ethanol jumped 8.2 cents to US$2.345 per gallon, and May finished up 8.7 cents at US$2.315.