September 21, 2007

 

CBOT Corn Review on Thursday: Sharply higher on technical, speculative buying

 

 

Chicago Board of Trade corn futures settled sharply higher Thursday, boosted by technical and speculative buying and underpinned by fundamental news, analysts said.

 

December settled 11 cents higher at US$3.69 1/4 per bushel, and March rallied 10 1/2 cents to US$3.85 1/4.

 

"The corn market rallied on technical buying amid a backdrop of positive fundamental news," said John Kleist of Kleist Ag Consulting.

 

On daily technical charts, electronically traded December corn finished at its highest level since late June.

 

Recent speculation that corn futures would experience a contra-seasonal rally during harvest appear to have been realized, with speculative money moving from wheat into corn and soybeans, Kleist said.

 

In open auction trading, commodity fund buying was estimated at 7,000 contracts.

 

Commodities in general were strong on U.S. dollar weakness, and corn was not an exception, a trader said. The weak dollar supports views that export demand will be strong, and export sales Thursday confirmed that, the trader said.

 

The U.S. Department of Agriculture reported weekly corn export sales were 2.032 million metric tonnes for the period ending Sept. 13, well above analyst estimates of 850,000 to 1.350 million tonnes.

 

News overnight that China will limit corn exports to try to keep inflation under control was also positive for corn, as it should keep demand for U.S. corn strong, an e-CBOT trader said.

 

Friday's price direction will depend on the dollar's movements in the currency market, outside markets and what the speculative money wants to do, the e-CBOT trader said.

 

On daily technical charts, electronically traded December corn rallied above its recent trading range high but settled below that level and remained under its 200-day moving average.

 

In open auction trading, RJ O'Brien bought 1,500 December and JP Morgan sold 500 December.

 

In options trading, MF Global bought 2,500 December US$3.10 puts, 1,000 December US$3.40 calls and 1,500 March US$4.60 calls. Tenco bought 5,000 December US$3.10 puts.

 

Oat futures ended higher Thursday, supported by spillover from strong wheat and corn prices, an analyst said. Oats were strong on the rally in wheat and corn but when wheat fell from its highs, oats gave back some of its gains, the analyst said.

 

December oats settled 5 1/4 cents higher at US$2.82 1/4 per bushel.

 

Ethanol futures ended mixed in thin trade. October ethanol settled 0.009 cent higher at US$1.599 per gallon and November ended down 0.005 cent at US$1.585.