August 31, 2006

CBOT Corn Review on Wednesday: Rallies following wheat; export hopes

A rally in wheat and hopes of solid export news buoyed corn futures at the Chicago Board of Trade on Wednesday, analysts said.

Most active December corn rose 6 cents to US$2.44 3/4 a bushel.

A late day surge in wheat underpinned corn into the closing bell, with the market gaining 2.5% after an otherwise quiet session. Wheat's strength throughout the day lifted corn, analysts said. With Wednesday's rally, December corn moved to its highest level since Aug. 11.

"Corn does have a fairly good demand base here and there are hopes we'll extend that in tomorrow's export sales report," said a veteran grain analyst.

The U.S. Department of Agriculture is scheduled to release its weekly export sales report Thursday. New-crop corn sales are expected between 1 million and 1.3 million metric tonnes, with old-crop sales seen ranging between 50,000 and 200,000 tonnes.

"The sales could be even greater than that," the analyst said. "We have over 700,000 tonnes in just visible daily sales from USDA. Many times when it's that great, the actual weekly sales are a lot more than that. We've had importers very anxious to price corn after that move to new swing lows we had a while back."

Corn trade was generally firmer Wednesday, supported by light fund buying and little desire to push the market lower, analysts said.

There was little fresh fundamental news to direct the market either way, and several analysts said corn will likely remain rangebound until USDA releases its crop production estimate Sept. 12. With harvest looming, the trade is going to want news of crop sizes, quality and test weights before establishing a new price direction.

Buyers included FC Stonnee buying 300 December; Man Financial buying 600 December; JP Morgan buying 500 December; and USA Trading buying 600 December. Sellers included FCStonnee selling 200 September; Fimat selling 300 December; JP Morgan selling 200 September; and O'Connor selling 500 December.