May 31, 2007

 

CBOT Corn Review on Wednesday: Sharply higher on fund, technical buying

 

 

Chicago Board of Trade corn futures ended sharply higher Wednesday, benefiting from strong fund and technical buying as well as a bullish longer-term weather forecast, analysts said.

 

July corn jumped 17 1/2 cents to US$3.82 1/4 per bushel, September rallied 17 cents to US$3.84 3/4, and December gained 13 3/4 cents to US$3.81 1/4.

 

Private weather forecasters predict a ridge will develop in early-to-mid-June that will keep the U.S. Midwest warmer and drier and as a result traders added premium back into the market, said Brian Hoops, president of Midwest Market Solutions in Yankton, S.D.

 

Heavy fund buying added to the gains, some of which was thought to be new money allocated to corn, a floor analyst said.

 

Fund buying was estimated at 9,000 contracts.

 

Technical buying was also a feature with July trading above its 50-day moving average for the first time since mid-March, Hoops said.

 

Most mid-day weather forecasts showed little change from earlier outlooks, continuing to support prices near the close.

 

Bull market spreading was also noted, with old-crop July gaining on new-crop December, a floor trader said.

 

Market direction on Thursday depends on the overnight weather forecasts, Hoops said.

 

On daily technical charts, July ended below its major moving averages and settled at its highest level since May 4.

 

In open auction trades, Rand Financial bought 1,500 July and 1,500 December, while Man Financial bought 1,000 December. JP Morgan sold 2,500 December and Tenco sold 500 December.

 

Oat futures settled higher as active fund buying and spillover from sharp gains in wheat and corn supported prices, an analyst said. Active spread trading, some of it by commodity funds rolling out of July and into September also added to the advances, he said.

 

July oats rose 3 1/2 cents to US$2.77 1/2 per bushel, September jumped 11 1/2 cents to US$2.78 1/2 and December gained 5 1/2 cents to US$2.69.

 

Ethanol futures ended mixed in thin activity. June ethanol rose 1 cent to US$2.24 cents per gallon and July gained .005 cent to US$2.095.