April 7, 2006

 

CBOT Corn Review on Thursday: Up on technicals, funds, outside markets

 

 

Corn futures at the Chicago Board of Trade settled higher Thursday, benefiting from technical and fund buying as well as strong gains posted in outside markets, floor sources said.

 

New crop December set a life-of-contract high.

 

May corn settled 5 1/4 cents higher to US$2.41 1/2 per bushel, July rose 5 1/4 cents to US$2.52 3/4, and December finished 4 3/4 cents higher to US$2.72 3/4.

 

Technical buying with May corn moving through US$2.38 and December climbing above US$2.70 on the daily charts was positive for the market early on, a floor analyst said.

 

Fund buying also supplied support to corn with net commodity fund buying estimated at 12,000 contracts. The funds were buying because of the stronger precious metals and energy markets, a commission house broker said.

 

In addition, some traders cited concerns that the continued wet weather pattern could delay planting and impact yields.

 

The recent plantings report was bullish and people are beginning to worry about the wet weather and its possible impact, the broker said.

 

News that weekly corn export sales were less than analysts expected was ignored by the market, traders said. The U.S. Department of Agriculture reported that weekly corn exports totaled 659,400 metric tonnes for the week ended March. 30, below analysts' estimates.

 

Rain or thunderstorms are forecast for Thursday and Friday for much of the U.S. Midwest western and eastern corn-growing areas, DTN Meteorlogix Weather said. Amounts could total .50-1.50 inch with locally heavier amounts possible. Drier weather returns to the region later in the weekend, DTN Meteorlogix Weather added.

 

On technical charts, May gapped open above Wednesday's high and traded close to the highs set last week.

 

Buyers on Thursday included Fimat, which bought 2,000 May, 1,000 July and 700 December. Prudential Financial bought 1,200 December, DT Trading bought 1,800 December, Citigroup bought 1,000 July, ABN Amro bought 1,100 December and 500 March, Rand Financial bought 600 December, UBS bought 600 May and RJ O'Brien bought 500 December.

 

Sellers on Thursday included ADM, which sold 1,000 December. FC Stonnee sold 2,000 December, ABN Amro sold 3,000 May, JP Morgan sold 3,000 July and 1,500 December, RJ O'Brien sold 1,500 December and 200 July, and Fimat sold 1,300 May and 300 December.

 

In spread trading JP Morgan bought 6,000 July-May.

 

Oat futures ended mixed in light trade as the market ignored the gains in corn, sources said. The May contract slipped 1/2 cent to US$1.74 per bushel, and the July contract also fell 1/2 cent to US$1.79 1/2.

 

Ethanol futures settled mostly higher, with the April contract up 7 cents at US$2.65 per gallon. The May contract finished 4 cents higher at US$2.59.