August 18, 2007

 

CBOT Corn Review on Friday: Higher on short-covering, firm outside markets

 

 

Chicago Board of Trade corn futures settled higher Friday, benefiting from the Federal Reserve's decision to cut the discount borrowing rate and ideas the market was oversold and due for a correction after the recent volatility, analysts said.

 

Sep corn rose 7 cents to US$3.28 1/2 per bushel, Dec settled 6 3/4 cents higher to US$3.45 3/4 and March gained 5 3/4 cents to US$3.60.

 

"With the Fed reducing interest rates, they showed that they would not let the current situation get out of hand," said Bob Anderson, an analyst with Commodity Services in Iowa.

 

Prices traded on either side of unchanged in choppy activity earlier in the session but the ability of outside markets to hold their gains helped support prices, a commission house analyst said.

 

In addition, stronger crude oil prices and a rally in soybeans helped add to the positive tonnee, a floor trader said.

 

Nearby crude oil was more than US$1.00 higher when the market closed and November soybeans settled 13 1/4 cents higher at US$8.27 3/4.

 

Price direction on Monday depends on the outside markets and if they can maintain the strength seen Friday. In addition, traders will be watching the direction of Hurricane Dean, an analyst said.

 

On daily technical charts, electronically traded December settled above its 20-day moving average.

 

Commodity fund buying was estimated at 2,000 contracts. In open auction trading, Tenco bought 1,000 Sep and 600 Dec, and Rand Financial bought 1,000 Dec.

 

In options trading, FC Stonnee bought 1,000 Dec US$2.70 puts, and sold 2,000 Dec US$3.00 puts. In addition, FC Stonnee bought 1,500 Dec 2008 US$4.50 calls and sold 1,500 Dec 2008 US$3.50 calls.

 

Oat futures ended higher as prices bounced as outside markets stabilized, helping support oats in very light trade, an analyst said. Sep oats rose 1 1/2 cents to US$2.45 1/2 per bushel, Dec gained 3 cents to US$2.53 1/2, and Mar ended up 1 1/2 cents to US$2.64.

 

Ethanol futures ended higher in thin activity. Sep ethanol rose 1.2 cents to US$1.812 per gallon and Oct settled 2 cents higher at US$1.73.

 

Friday afternoon the Commodity Futures Trading Commission is scheduled to release the weekly commitment of traders report for the period ending Aug. 14.

 

Monday, the U.S. Department of Agriculture is scheduled to release the weekly crop progress report at 4:00 p.m. EDT. (2000 GMT).