March 21, 2007

 

CBOT Corn Review on Tuesday: Settles near highs on fund, technical buying

 

 

Chicago Board of Trade corn futures settled higher Tuesday as fund and technical buying supported prices near the close after choppy trading during much of the session, floor traders said.

 

May corn rallied 7 1/4 cents to US$4.05 1/4 a bushel, July settled 7 cents higher at US$4.17, and December ended up 3 1/4 cents at US$4.09 1/4.

 

There wasn't much in the way of fresh news to move the market but fund-buying helped underpin prices after mid-session, said Vic Lespinasse of AG Edwards & Sons.

 

Technical buying also added to the gains, with technical strength emerging after May traded above the US$4.00 level, Lespinasse added.

 

Commodity fund-buying was estimated at 5,000 contracts.

 

Earlier in the session, the nearby old crop months were supported by bull-market spreading as people were interested in "bull spreading at these price levels," a commission house analyst said. After several days of choppy trading there just wasn't much interest in selling corn, he added.

 

The strong close Tuesday could bring about additional short-covering on Wednesday, the analyst said.

 

On daily open auction technical charts, May settled at its higher level in a week, but remained below most of its major moving averages.

 

Buyers on Tuesday included Tenco, which bought 600 December; UBS, which bought 800 July; and Man Financial, which bought 400 December.

 

Sellers included JP Morgan, which sold 300 May and 900 July, and Rand, which sold 600 July.

 

In options trading, Tenco bought 700 May US$4.20 calls and sold 700 May US$4.30 calls.

 

Oat futures settled moderately higher as fund-buying continued to underpin prices, a floor trader said.

 

Unlike Monday's session, there was no commercial hedging in the nearby months, though there was hedging activity in the new-crop contracts, the trader said.

 

May oats settled 6 1/2 cents higher at US$2.83 1/2 a bushel and traded just below the life-of-contract high of US$2.84 3/4 set in early November. July oats gained 5 1/2 cents to US$2.84 3/4.

 

Ethanol futures ended lower in modest trading. The April contract fell 2.5 cents to US$2.305 a gallon. The May contract settled down 0.005 cent at US$2.180 a gallon.