April 19, 2006

 

CBOT Corn Review on Tuesday: Up on spillover strength, outside markets

 

 

Corn futures at the Chicago Board of Trade settled modestly higher Tuesday as spillover strength from wheat and the soy complex and stronger outside markets underpinned values, sources said.

 

A slightly lower-than-expected corn-planting pace in Monday's weekly crop progress report and light fund buying added some support, they added.

 

May corn settled 2 3/4 cents higher at US$2.39 1/4 per bushel, July gained 2 1/2 cents to US$2.50 3/4, and December rose 3 cents to US$2.72 1/4.

 

Corn was supported by the gains in wheat and the soy complex, a commission house analyst said.

 

Ideas that hard red winter wheat futures were oversold and supportive weather forecasts pushed wheat futures higher with soft red winter wheat, the type traded at the CBOT, moving in sympathy, the analyst said. July CBOT wheat rose 5 1/2 cents to US$3.55.

 

Sharply higher energy markets also provided support with crude oil futures trading at all-time highs, with soy oil, along with corn energy sources, rallying in sympathy, a floor trader said.

 

Modest fund buying added to the gains, the trader added.

 

Monday's crop progress report added thin support, with the corn planting pace slightly behind last year and the five-year average. However, the planting progress in Illinois was well behind last year and behind the five-year average, and that limited selling interest, the commssion house analyst said.

 

After moisture predicted for this week moves through the Midwest, the latest 6-10-day weather forecast for both the western and eastern U.S. Midwest calls for near-normal to below-normal precipitation, DTN Meteorlogix Weather said.

 

Buyers Tuesday included ABN Amro, which bought 500 July. Calyon Financial bought 500 July, Citigroup bought 700 July, Goldenberg-Hehmeyer bought 800 May, Man Financial bought 500 July, RJ O'Brien bought 1,200 May and the Refco division of Man Financial bought 600 July and 400 May.

 

Sellers Tuesday included JP Morgan, which sold 600 July and 100 May. FC Stonnee sold 200 May, Bunge sold 100 May, Prudential sold 200 May, RJ O'Brien sold 200 May and Tenco sold 200 May.

 

In spread trading, Prudential Financial bought 2,500 May-December.

 

Commodity fund buying was estimated at a net 5,000 contracts.

 

Oat futures ended mostly lower as early light advances based on follow through from Monday evaporated as light fund selling pressured prices, floor sources said. May oats fell 3 1/4 cents to US$1.71 1/2 per bushel and July declined 2 cents to US$1.77 3/4.

 

Ethanol futures ended higher. The May contract settled 1 1/2 cents higher at US$2.74 per gallon. June did not trade and gained 1 1/2 cents to US$2.72 1/2.