September 21, 2006

 

CBOT Corn Review on Wednesday: Settles higher on firm cash, technicals

 

 

Chicago Board of Trade corn futures finished higher Wednesday, supported by thin country movement of cash grain, fund and technical buying, sources said.

 

December gained 2 1/2 cents to US$2.49 cents per bushel, and March rose 2 cents to US$2.62 1/4.

 

The corn market was supported Wednesday by the absence of cash grain moving in the system, said Don Roose, president of US Commodities in West Des Moines, Iowa. There is not enough cash grain entering the pipeline as crops move into harvest, he said.

 

In addition, combining has not started out at a fast pace, but is rather sputtering, so as a result the market is holding at these levels, he added.

 

Fund and technical buying along with anticipation of a solid weekly export sales report due out on Thursday added support, floor sources said.

 

December corn tried to move through strong technical resistance at US$2.50 several times during the day but was unable to do so, limiting the upside, they added.

 

Firm soybean meal prices also provided support, a commission house trader said. December soybean meal rose US$3.20 per short tonne to US$165.80, its highest settlement price since Aug. 4.

 

On technical charts, December corn settled above its 40-day moving average and just below its 50-day moving average of US$2.50.

 

Buyers Wednesday included Fortis, which bought 4,000 December; Fimat, which bought 1,000 December; Man Financial, which bought 500 December; and UBS, which bought 500 December 2006.

 

Advantage Futures sold 3,000 December, FC Stonnee sold 300 December, ad RJ O'Brien sold 300 December.

 

Commodity fund buying was estimated at 2,500 contracts.

 

Oat futures finished moderately lower in active trading, sources said.

 

Fund buying supported the market early in the session but light commercial-related selling helped trim the gains and the funds decided to sell, pressing the market, a commission house analyst said.

 

December oats fell 4 3/4 cents to US$1.98 1/4 per bushel and March dropped 4 1/4 cents to US$2.05.

 

Ethanol futures settled modestly lower in thin activity. October ethanol fell 5 cents to US$1.79 per gallon and November lost 6 1/2 cents to US$1.77.

 

On Thursday, the U.S. Department of Agriculture is scheduled to release the weekly export sales report for the week ended Sep. 14. Analysts expect sales between 700,000-900,000 metric tonnes. Sales for the week ended Sept. 7 totaled 669,900 tonnes.