March 17, 2007

 

CBOT Corn Review on Friday: Ends higher on fund short covering

 

 

Chicago Board of Trade corn futures settled higher Friday but down from the highs set after mid-session as fund buying, thought to be short covering, supported prices, analysts said.

 

May corn settled 1 3/4 cents higher to US$3.99 1/2 per bushel, July also rose 1 3/4 cents to US$4.10 3/4, and December gained 5 1/2 cents to US$4.03.

 

Corn traded both sides of Thursday's settlement prices in choppy activity ahead of and after the release of a planted acreage estimate from Informa Economics. Informa estimated 2007-08 U.S. corn planted acreage at 87.834 million acres, 9.5 million acres above the 78.3 million planted by U.S. farmers in 2006.

 

The U.S. Department of Agriculture is scheduled to release its planting intentions estimate for the 2007-08 marketing year Friday, March 30.

 

The Informa number was not as high as other estimates and put a "little realism back into the market," said Jack Scoville, vice-president at Price Futures Group.

 

In addition, corn held near-term support and that brought in some fund short covering, a floor analyst said.

 

Fund buying was estimated at 5,000 contracts.

 

Long-term fundamentals remain in place and won't change until the crop is grown, so it appears that prices will not decline much further in the short-term, Scoville said.

 

Looking ahead, December closed above US$4 per bushel, and that should be supportive to prices next week, a commission house broker said.

 

On daily technical charts, May traded below its 100-day moving average for the first time since late September but settled above it.

 

Buyers on Friday included JP Morgan, which bought 1,500 December; and Penson GHCO, which bought 1,000 December.

 

Sellers included Rand, which sold 1,000 December, and JP Morgan, which sold 1,000 December.

 

In spread trading Penson GHCO spread 4,500 December-July.

 

In options trading, Fimat bought 3,000 December US$4.30 calls and sold 3,000 December US$5.50 calls.

 

Oat futures finished higher as speculative fund buying supported prices despite light commercial-related selling, a floor analyst said.

 

May oats gained 4 1/2 cents to US$2.74 1/2 per bushel and July rose 4 3/4 cents to US$2.77 1/2.

 

Ethanol futures settled unchanged to slightly higher. The April contract settled unchanged at US$2.32 per gallon. The May contract rose 2.5 cents at US$2.175 per gallon.

 

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

 

Monday, the USDA is scheduled to release the weekly export inspections report at 11 a.m. EDT (1500 GMT).