March 26, 2008

 

CBOT Corn Review on Tuesday: Up 20cent limit; speculative buying, outside support

 

 

Chicago Board of Trade corn futures rallied Tuesday, extending the recovery from last week's losses, buoyed by speculative-led buying amid supportive outside influences and bullish fundamental outlooks.

 

Corn futures ended at its upper daily trading limits of 20 cents per bushel.

 

May corn settled 20 cents higher at US$5.44 3/4, July corn ended 20 cents firmer at US$5.57, and December finished 20 cents stronger at US$5.59 3/4.

 

Outside market influences had a positive impact on the grain complex Tuesday, with weakness in the U.S. dollar and climbing gold prices generating bullish momentum to lift futures to limit levels, said Dale Durchholz, analyst with Agrivisor in Bloomingtonne, Ill.

 

Corn futures also received fundamental support from weather concerns, as wet conditions and flooding in the southern corn belt raised fears of planting delays, he added.

 

Otherwise, futures were caught in the money game, with speculative funds buying back into the market on the easing of turmoil in financial markets that caused a sell-off in commodities last week, traders said.

 

Inflationary-based buying served as a spark to attract buyers, with supportive long-range fundamentals surrounding smaller 2008 acreage outlooks and strong demand underpinning influences, traders added.

 

Meanwhile, firming cash basis levels generated light support, as the recent break in prices dried up farmer selling in conjunction with a lack of commercial hedging, Durchholz added.

 

The DTN Meteorlogix forecast said eastern and southern areas of the Midwest can expect up to 1 1/2 inches of rainfall Wednesday and Thursday. The Delta region is likely to see only light showers into the weekend, but by Sunday or Monday rainfall should average near to above normal.

 

In pit trades, buyers and sellers were scattered among various commission houses with speculative fund buying estimated at 6,000 lots.

 

CBOT oat futures were lower, retreating from earlier gains on continued commission house and fund liquidation, a floor trader said. May oats closed 1 3/4 cents lower at US$3.34, and July oats ended 1 1/2 cents lower at US$3.45.

 

Ethanol futures ended firmer. April ethanol closed up 3 cents at US$2.45 per gallon, while May ethanol closed up 3.7 cents at US$2.412.