September 22, 2006

 

CBOT Corn Review on Thursday: Big gains on heavy fund, technical buying

 

 

Chicago Board of Trade corn futures settled with strong gains Thursday buoyed by heavy fund and technical buying, sources said.

 

December rose 8 1/4 cents to US$2.57 1/4 cents per bushel, and March jumped 7 3/4 cents to US$2.70. e-CBOT day session volume in December was 72,870 contracts.

 

"It was a broad based rally based on a combination of things," said Vic Lespinasse, with AG Edwards & Sons. Big fund buying helped the market move through a quadruple top at the US$2.50 level which brought in additional commission house buying, he said.

 

Overall fund buying was estimated at 21,000 contracts.

 

Corn drew additional support from wet weather forecasts for this weekend with the possibility of additional rain next week possibly delaying harvesting, a floor analyst said.

 

Better than expected weekly export sales and spillover from wheat and the soy complex added to the upside, he added.

 

December wheat ralled 13 3/4 cents to US$4.21 1/2 and November soybeans rose 8 3/4 cents to US$5.58.

 

The U.S. Department of Agriculture reported weekly corn exports for the period ending Sep. 14 were 1.030 million metric tonnes, above the 700,000-900,000 expected by analysts.

 

On open auction technical charts December traded up to its highest level since early August.

 

"Dec corn filled a gap created in August and from a technical standpoint looks great," a commission house broker said. December settled just below its 200-day moving average.

 

Buyers Thursday included ADM Investor Services, which bought 8,000 December, Prudential Financial, which bought 2,000 December, UBS, which bought 2,000 December, and Fortis, which bought 1,300 December.

 

Fimat sold 1,000 December and 1,500 December 2006, UBS sold 1,000 March, and JP Morgan sold 1,000 March, 500 December and 400 July.

 

In options trading, Rand Financial bought 2,000 December US$2.40 puts.

 

Oat futures ended with modest gains as spillover support from the rest of the floor provided strength, a floor analyst said.

 

December oats settled 2 cents higher to US$2.00 1/4 per bushel and March gained 1 3/4 cents to US$2.06 3/4.

 

Ethanol futures ended mixed in light trade. October ethanol slipped 2 cents to US$1.77 per gallon and November declined 3.5 cents to US$1.735.