September 22, 2007

 

CBOT Corn Review on Friday: Settles at or near highs on technical, speculative buying

 

 

Chicago Board of Trade corn futures ended Friday at or near session highs made at the close as technical and speculative buying helped December settle above its 200-day moving average for the first time since late June, analysts said.

 

December settled 7 1/4 cents higher at US$3.76 1/2 per bushel and March gained 6 3/4 cents to US$3.92.

 

The buying late in the session pushed prices past technical resistance and beyond pre-weekend profit-taking, an e-CBOT trader said.

 

"Strong gains in wheat were a supporting factor for corn," said Dale Durchholz, an analyst at Agrivisor in Bloomington, Ill.

 

December wheat settled 24 cents higher at US$8.74 on strong export demand and technical buying, an analyst said.

 

Speculative buying also added to the gains in corn, with open auction commodity fund buying estimated at 8,000 contracts.

 

Recent news that China would not export corn this year has led to an air of uncertainty in the market, with some participants looking beyond the large crop produced in the U.S. this year and focusing on demand potential, Durchholz said. The corn market is also realizing that prices need to remain strong in order to maintain much of the acreage gained this year, Durchholz said.

 

Monday's Price direction will depend on the harvest progress reported over the weekend, as well as the prices of soybeans and wheat and their impact on corn, the e-CBOT trader said.

 

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

 

In open auction trading, MF Global bought 700 December and Citigroup bought 500 December.

 

In options trading, Iowa Grain bought 1,500 December US$3.20 puts and sold 500 December US$4.20 calls. UBS sold 1,000 December US$4.30 calls.

 

Oat futures settled modestly higher Friday on spillover from stronger corn futures, which helped the market recover from early losses on light fund selling, a commission house analyst said.

 

December oats settled 1 cent higher at US$2.83 1/4 per bushel.

 

Ethanol futures ended mixed in very light trade. October ethanol settled 2.4 cents lower at US$1.575 per gallon and November ended up 1 cent at US$1.595. Friday afternoon, the Commodity Futures Trading Commission is scheduled to release the weekly commitment of traders report for the period ending Sept. 18.