September 27, 2006

 

CBOT Corn Review on Tuesday: Rallies higher on sharp wheat, soy gains

 

 

Chicago Board of Trade corn futures settled with strong gains Tuesday as a limit-up rally in wheat futures and sharply higher soybean prices helped support corn futures, analysts said.

 

September corn settled 12 3/4 cents higher at US$3.36 3/4 per bushel, December gained 13 1/4 cents to US$3.53 1/4 and March also rose 13 1/4 cents to US$3.69 1/4.

 

"The rally in wheat futures to limit-up levels was responsible for a lot of the strength in corn futures Tuesday," said Jack Scoville, vice-president and analyst at Price Futures Group. There wasn't much bullish news for corn to be that much higher and the U.S. is looking at a pretty big crop this fall, but with wheat limit-up all day, corn wasn't going to go down, Scoville said.

 

December wheat settled at US$8.05 1/2, up 30 cents with the limit-less spot month September contract gaining 40 cents to US$8.07.

 

Technical strength also added support with December corn trading above US$3.50 for the first time since early last week, an E-CBOT trader said.

 

Stronger soybean futures also added to the firm tonnee, with November soybeans settling 25 cents higher at US$9.07 1/2.

 

Corn, wheat and soybean prices all need to go higher to attract acreage for next year, a commission house analyst said.

 

Wheat's price direction will set the tonnee for corn market price movement, the analyst said.

 

On daily technical charts, electronically traded December corn settled above several major moving averages and traded to its highest level since Aug. 22.

 

In open auction trading, FC Stonnee bought 400 December, Fortis bought 300 December and Fimat sold 500 December corn contracts.

 

Commodity fund buying in open auction trading was 5,000 contracts.

 

In options trading, Tenco bought 2,000 December US$3.00 puts and MF Global bought 1,000 October US$3.30 corn puts.

 

Oat futures surged higher as spillover from the limit-up gains in wheat futures and heavy fund buying pushed prices higher in active trade, a commission house analyst said.

 

September oats jumped 15 cents to US$2.57 per bushel, December settled 7 3/4 cents higher to US$2.62 1/2, and March rose 6 1/4 cents to US$2.72.

 

Ethanol futures settled mostly lower in light activity. October ethanol fell 5.7 cents to US$1.569 per gallon while November rose .003 cents to US$1.645.

 

Tuesday afternoon the U.S. Department of Agriculture is scheduled to release the weekly crop progress for the week ended Sept. 3 at 1600 EDT (2000 GMT).

 

Analysts see conditions down two percentage points to up two percentage points from last week.