April 22, 2006

 

CBOT Corn Review on Friday: Modestly higher, following energy

 

 

Corn futures finished with modest gains Friday, shrugging off weakness on the opening as light fund buying and higher energy prices from outside markets lifted prices, sources said.

 

May corn settled 3/4 cent higher at US$2.36 1/2 per bushel, July rose 1/2 cent to US$2.48, and December gained 1 1/4 cents to US$2.70 3/4.

 

"The market put in an energy premium in corn," said Mike Zuzolo, chief analyst at Risk Management Commodities in Lafayette, Ind. "The investment guys see corn as energy as much as they see it for animal feed and food grains," he added.

 

Corn is not trading its fundamentals right now, a floor analyst said. Next week's weather is favorable to planting, but the market is being supported by the strength in energy and metals markets, he added.

 

Technically, July corn held support around the US$2.45 level on the daily charts and afterward the funds came in and supplied some light support, he noted.

 

Despite the strength in outside markets, volume was defined as light by several floor sources.

 

Generally favorable conditions from this weekend to the middle of next week for fieldwork progress are expected, according to DTN Meteorlogix Weather. Mostly dry conditions in the U.S. Midwest are expected through the weekend with light rain forecast in the north Friday.

 

Scattered showers this weekend and into Monday will produce rainfall of up to 1 inch, mainly in southern Iowa through eastern Missouri and central through southern Illinois, DTN Meteorlogix Weather noted.

 

Temperatures are expected to average from near to above normal to near to below normal across the region, with the weather pattern becoming more favorable for fieldwork across the U.S. corn belt, DTN Meteorlogix Weather said.

 

Buyers Friday included JP Morgan, which bought 3,000 July, Rosenthal bought 1,200 May, RJ O'Brien bought 500 May, Citigroup bought 300 May and 300 July, FC Stonnee bought 300 July, and 300 May, FC Stonnee bought 300 July, 300 December and 200 May, and Term bought 200 May.

 

Sellers Friday included JP Morgan, which sold 1,000 July, Fimat sold 300 May, Calyon sold 300 May, Tenco sold 400 December and 200 September, and RJ O'Brien sold 200 May and 100 July.

 

Commodity fund buying was estimated at 2,400 contracts.

 

Oat futures settled higher on light position squaring, floor sources said. The May contract gained 1 1/2 cents to US$1.73 1/2 per bushel, July rose 1 3/4 cents to US$1.79 1/4, and December oats settled up 1 1/4 cents to US$1.72 3/4.

 

Ethanol futures finished mixed in quiet trade. May ethanol settled 1 cent higher at US$2.74 per gallon, June did not trade and fell 1 1/2 cents to US$2.71.

 

Friday afternoon after the close of trading the Commodity Futures Trading Commission is scheduled to release the Commitments of Traders report as of April 18.

 

On Monday, the U.S. Department of Agriculture is scheduled to release the weekly export inspections at 10 a.m. CDT and the weekly crop progress at 3 p.m. CDT.