May 12, 2006

 

CBOT Corn Review on Thursday: Higher on technical buying, outside markets

 

 

Corn futures finished moderately higher Thursday, benefiting from stronger outside markets and technical buying, floor sources said.

 

The July contract settled 7 cents higher at US$2.47 per bushel and traded at its highest level since April 28. The December contract gained 6 cents to US$2.71 1/4.

 

Technically, July corn moved through several levels of resistance, including the US$2.45 level which had been seen as a significant resistance level, a floor source said.

 

It was a combination of factors, a floor trader said. Crude oil was higher which prompted the idea of corn for energy, the funds were light buyers, export sales were above expectations and the supply and demand report is due out Friday.

 

Gold, silver and crude oil all ended higher on the day.

 

Net commodity fund buying was estimated at 4,000 contracts.

 

Weekly U.S. corn export sales were 1,105.1 million metric tonnes, above analyst's estimates of 600,000-1.0 million tonnes.

 

On Friday, the U.S. Department of Agriculture is scheduled to release the supply and demand estimates for the 2005-06 and 2006-07 crop years.

 

An average of 14 analysts surveyed by Dow Jones Newswires expects 2005-06 corn ending stocks at 2.265 billion bushels, 36 million below the 2.301 estimated by the USDA in April.

 

The average ending stocks estimate for 2006-07 was 1.582 billion bushels. This will be the first ending stocks estimate issued by the USDA for the 2006-07 crop year.

 

Some traders cited the cool, wet conditions in parts of the U.S. Midwest as a supporting factor, as the weather slows the emergence of the newly planted crop.

 

Much of the U.S. Midwest is expected to have temperatures remain in a below to much below normal trend over the next 10 days, DTN Meteorologix Weather said.

 

In the western section of the region, overnight lows west of the Mississippi will drop to the upper 30s to mid-40s Fahrenheit with daytime highs only expected to be in the 50s to low 60s Fahrenheit, DTN Meteorologix Weather said.

 

In the eastern U.S. Midwest, additional rain will develop from Thursday into Saturday. Highs will reach only the upper 40s to mid-50s Fahrenheit, with lows in the upper 30's to low 40'sFahrenheit, DTN Meteorologix Weather said.

 

On daily technical charts, July corn settled above its 100-day moving average as well as its 10-day, 20-day and 40-day moving averages.

 

Buyers Thursday included ABN Amro, which bought 2,500 July, Fimat bought 1,000 December and 400 July, Man Financial bought 1,600 July, JP Morgan bought 600 December 2007, FC Stonnee bought 400 December 2007 and Shatkin bought 200 July.

 

Sellers Thursday included RJ O'Brien, which sold 2,000 July, Man Financial sold 1,000 July, ADM sold 500 July, Fimat sold 600 July, JP Morgan sold 500 July and 300 December, and Calyon sold 300 July.

 

Oat futures settled mostly higher as light fund buying and spillover support from the rest of the floor underpinned prices, a commission house analyst said. The July contract ended 2 3/4 cents higher at US$1.91 3/4 per bushel with the December finishing unchanged at US$1.82 3/4

 

Ethanol futures settled modestly higher in thin activity. The June contract settled 3 1/2 cents higher at US$2.86 1/2 per gallon and the July contract, which didn't trade, rose 2 cents to US$2.75.