May 25, 2007

 

CBOT Corn Review on Thursday: Settles higher, nearbys rally on spreads

 

 

Chicago Board of Trade corn futures settled higher Thursday in choppy trading as bull market spreading supported the nearby with spillover strength from wheat adding to the firm tone, floor analysts said.

 

July corn rose 8 cents to US$3.76 1/2 per bushel, September settled 5 3/4 cents higher at US$3.76 3/4, and December gained 2 1/4 cents to US$3.72 3/4.

 

Wheat futures settled sharply higher on poor weather in parts of Europe and Ukraine. July wheat rallied 14 1/2 cents to US$4.91 per bushel.

 

Deferred months ended with modest gains as midday weather forecasts predicted increased prospects for moisture in the eastern U.S. Midwest next week.

 

"The market will hang on every forecast," said Shawn McCambridge, senior grain analyst at Prudential Financial. The midday forecasts looked a bit wetter and the new crop months gave up some of their gains, he said.

 

The old-crop contracts were underpinned by bull spreading and speculative buying after Wednesday's price weakness with a lack of farmer selling in the cash market also providing support to the nearby, an analyst said.

 

Export sales were in line with analyst expectations and had little impact on the market. The U.S. Department of Agriculture reported corn export sales were 1.071 million metric tonnes for the week ended May 17. Included in the total were sales of 413,000 tonnes for delivery in 2007-08.

 

Market direction Friday will depend on the weather forecast and how many participants show up to trade ahead of the long holiday weekend, an analyst said.

 

The CBOT is closed Monday in observance of Memorial day.

 

On daily open-auction charts, July corn settled above its 10-day, 20-day, 40-day and 200-day moving averages.

 

Commodity fund buying was estimated at 3,000 contracts.

 

Oat futures finished higher as spillover from strong wheat futures and light fund buying underpinned prices, a floor analyst said. The speculative interests continue to support the market, the analyst added.

 

On daily technical charts, July oats gapped open higher and remained above its major moving averages.

 

July oats rose 4 1/2 cents to US$2.81 per bushel while December gained 5 cents to US$2.69.

 

Ethanol futures finished higher in light trade. June ethanol settled up 2 cents to 2.175 per gallon and July rose .005 cent to US$2.06.

 

Friday afternoon, the Commodity Futures Trading Commission is scheduled to release the commitment of traders report for the period ending May 22.