March 4, 2008

 

CBOT Corn Review on Monday: Sharply higher on spillover, speculative buying

 

 

Chicago Board of Trade corn futures settled with strong gains Monday, buoyed by speculative buying and strength in outside inflationary markets. New all-time highs were established in most contract months early in the session.

 

May corn settled 10 cents higher at US$5.66 1/2 per bushel, after trading as high as US$5.73 1/2. December gained 11 1/4 cents to US$5.76 after reaching a high of US$5.82 1/2.

 

The market enjoyed bullish news from several sources, said Bill Nelson, associate vice president at Wachovia Securities. Crude oil, silver and gold were at or near record highs during the session and that boosted corn, he said. Nearby crude oil ended higher but well off its earlier levels.

 

In addition, follow through from good-sized gains set in overnight activity and a surge higher in both soybeans and wheat added to the rally, he said. New all-time highs were set almost across the board in soybeans and soybean oil also set fresh all-time highs.

 

News that China might consider importing additional agricultural products to help ease inflation concerns was supportive as well, considering the backdrop of inflation fears and worries about adequate supplies of feed grains, a commission house analyst said.

 

On daily open-auction technical charts, May corn gapped open higher and settled well above its major moving averages. Commodity fund buying in open- auction trading was estimated at 6,000 contracts.

 

In options trading, Rand Financial sold 2,000 July US$6.00 calls and JP Morgan sold 500 December US$6.00 calls.

 

Market direction Tuesday will key off the outside markets and what the speculative trade does, an electronic trader said.

 

Oat futures settled sharply higher, boosted by speculative buying, with new all-time highs established in most contracts, an analyst said. Light commercial selling helped to cap the gains, the analyst said.

 

May oats settled 11 cents higher at US$4.45 3/4 per bushel and December oats gained 12 cents to US$4.69.

 

Ethanol futures ended higher. March ethanol rose 4.1 cents to US$2.401 per gallon and April settled up 4 cents at US$2.40.