August 28, 2009

 

CBOT Corn Review on Thursday: Up slightly amid late surge

 

 

Chicago Board of Trade corn futures closed higher Thursday thanks to a late surge of end-of-month positioning and outside market support, traders said.

 

September corn ended up 2 1/2 cents to US$3.23 per bushel, and December corn ended up 3 cents to US$3.29 1/4.

 

Traders and analysts said the move was not fueled by fundamental factors. Prices were flat to slightly lower throughout the day before climbing near the end of the session. Late gains in crude oil and the stock market helped prompt the gains, but are no reason for bulls to get too excited, said Arlan Suderman, analyst for Farm Futures.

 

"I think we're at a level with prices that end-users have been buying the breaks, but have been unwilling to chase the market," said Arlan Suderman, analyst for Farm Futures.

 

A trader said the late bump was due to the approaching month's end. He said the market is within striking distance of technical trend lines that could trigger buy stops. The 40-day moving average for December is at US$3.35 1/4.

 

"If the fund money is going to push it up, this is the time to do it," the trader said. He said the buying could continue Friday. Funds bought an estimated 2,000 contracts on Thursday.

 

Shawn McCambridge, senior grains analyst for Prudential Bache, said the market is "kind of well-balanced right now," with underlying support coming from the crop's lack of maturity and overhead pressure from farmer selling.

 

"We just have sideways, range-bound-type trade until something happens - either the crop doesn't have a frost threat anymore or the frost comes in and hits us," McCambridge said.

 

Analysts said there is no immediate frost threat to the crop. The further along in September the forecast continues to lack a frost, the more pressure the market will feel, McCambridge and others said.

 

Said Suderman: "I think the best thing corn has going for it now is strong demand for soy."

 

CBOT oats futures inched higher Thursday. September oats were up 1/4 cent to US$2.16 per bushel and December oats were up 1/4 cent to US$2.30.

 

Ethanol futures were higher. September ethanol ended up US$0.010 to US$1.627 per gallon and December ethanol ended up US$0.004 to US$1.599.