September 16, 2006

 

CBOT Corn Review on Friday: Ends higher on short covering, soy gains

 

 

Chicago Board of Trade corn futures ended higher Friday as short covering and early spillover strength from soybeans helped underpin values, sources said.

 

December rose 4 1/2 cents to US$2.41 3/4 cents per bushel, and March gained 4 1/4 cents to US$2.55 1/2. e-CBOT day session volume in December was 55,826 contracts.

 

Corn saw some short covering come into the market ahead of the weekend, said Tom Leffler, analyst with Leffler Commodities in Augusta, Kan. In addition, the liquidation of new crop-old crop spreads added to the strength in the nearby months. December 2007 has gone up for quite some time and the spread between it and the nearby December 2006 widened out and was due for some unwinding, he added.

 

Spillover strength from higher soybean prices and light technical buying also contributed to the upward momentum, with December corn trading above resistance at US$2.40, a floor trader said.

 

Forecasts for colder and wetter weather in the northern U.S. Midwest which could delay early harvest efforts were also cited as supportive by a floor analyst.

 

On open auction technical charts, December traded an outside day with a higher high and a lower low than Thursday's trading range. It finished above its 20-day moving average and just below its 10-day moving average.

 

Buyers Friday included Fimat, which bought 1,000 December 2007 and 500 December, Man Financial, which bought 800 December, JP Morgan, which bought 800 July ad Rand Financial, which bought 500 December.

 

JP Morgan sold 1,000 March and UBS sold 300 December 2007.

 

Commodity fund buying was estimated at 4,000 contracts.

 

In options trading, JP Morgan sold 1,500 December 2008 US$3.50 calls.

 

Oat futures ended modestly higher as thin fund buying provided support for prices, a floor trader said.

 

December oats finished 3/4 cent higher at US$2.00 1/2 per bushel and March gained 1/2 cent to US$2.07

 

Ethanol futures ended mixed. October ethanol did not trade and ended unchanged at 1.86 per gallon. November also didn't trade and settled 1 cent lower at US$1.85.

 

Friday afternoon the Commodity Futures Trading Commission is scheduled to release the latest commitment of traders report and on Monday, the USDA is scheduled to release the weekly export inspections at 10:00 a.m., and the weekly crop progress report at 3:00 p.m. CDT (2000 GMT).