May 6, 2006

 

CBOT Corn Review on Friday: Ends modestly higher, led by wheat rally

 

 

Corn futures at the Chicago Board of Trade settled modestly higher Friday, underpinned by sharp gains in wheat futures early in the day and by light technical and fund buying on ideas that recent losses were overdone and due for a correction, a commission house analyst said.

 

July gained 1 1/4 cents to US$2.40 1/2 per bushel and December rose 1 1/2 cents to US$2.64.

 

More than anything else, corn rallied on the wheat strength, said Steve Bruce, a corn broker with Man Financial.

 

A lower-than-expected hard red winter wheat production estimate from winter wheat tour participants boosted wheat futures. July wheat settled 9 3/4 cents higher at US$3.72 1/4.

 

The gains in wheat underpinned corn, but the weather in the Midwest next week looks pretty good next week, limiting the upside, he said.

 

Technically the market was oversold and due for a bounce, the commission house analyst said. July held that US$2.39 level Thursday on daily charts and that was supportive, he added.

 

Light commodity fund buying was also a factor, a floor trader said. Net commodity fund buying was estimated at 4,000 contracts.

 

Mostly dry weather is expected in much of the U.S. Midwest over the next several days, DTN Meteorologix Weather said.

 

Light to locally moderate showers are forecast in the western U.S. Midwest on Monday with the eastern section of the region forecast to receive light to moderate showers and possible thundershowers on Monday and Tuesday, DTN Meteorologix Weather said.

 

Temperatures are expected to average below normal Friday and Saturday and near to above normal Sunday in the western U.S. Midwest. In the eastern U.S. Midwest, temperatures will average below normal over the next several days, DTN Meteorologix Weather said.

 

On daily technical charts, July settled below its 10-day, 20-day and 50-day moving averages but above its 100-day moving average.

 

Buyers Friday included ADM, which bought 600 July. Bunge bought 1,500 July, Calyon bought 1,000 July, Fimat bought 1,000 July, JP Morgan bought 1,000 July, ABN Amro bought 800 July, Rand bought 1,000 July, and Iowa Grain bought 500 July.

 

Sellers Friday included JP Morgan, which sold 1,500 July and 1,500 December. Man Financial sold 1,000 July, O'Connor sold 1,000 July, ABN Amro sold 500 July, and Fimat sold 400 July.

 

Oat futures finished slightly higher, benefiting from light technical buying as July gapped open higher on daily technical charts in thin activity, a commission house analyst said. The July contract gained 1 cent to US$1.90 1/2 per bushel and December ended up 1/4 cent at US$1.83.

 

Ethanol futures settled modestly higher in quiet trade. The spot-month May contract rose 6 cents to US$2.77 per gallon. The June contract settled 5 cents higher to US$2.72.

 

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