September 27, 2006

 

CBOT Corn Review on Tuesday: Higher; technical buying supports

 

 

Chicago Board of Trade corn futures settled higher Tuesday as technical and light fund buying underpinned prices in the absence of strong selling interest, sources said.

 

December gained 4 1/4 cents to US$2.59 cents per bushel, and March ended up 4 1/2 cents to US$2.72 3/4. e-CBOT day session volume in December was 46,389 contracts.

 

The market benefited from technically inspired fund buying, a commission house trader said.

 

There wasn't much interest is selling and participants either stayed on the sidelines or bought it, the trader noted. The lack of selling interest magnified the gains, he added.

 

Overall fund buying was light at an estimated 2,000 contracts.

 

December corn traded through its 200-day and 100-day moving averages on open auction technical charts and at its highest level since Aug. 4 before settling just under its 100-day moving average.

 

The harvest is slightly behind normal and some forecasters are looking for wetter conditions in the western U.S. Midwest next week, a floor trader noted.

 

The U.S. Department of Agriculture reported Monday that 13% of the U.S. corn crop had been harvested as of Sept. 24, slightly below the pace in 2005 as well as the five-year average.

 

Talk that early harvested yields are not as good as expected also provided some support, a commission house analyst said.

 

Buyers Tuesday included JP Morgan, which bought 700 December, Man Financial, which bought 1,000 December, and Rand, which bought 500 December contracts.

 

Man Financial sold 1,000 December.

 

In options trading, Tenco sold 3,000 March 2007 US$3.00 calls, and bought 1,500 March US$2.70 puts. JP Morgan sold 2,000 March 2007 US$2.60 puts and bought 1,000 US$2.60 calls.

 

Oat futures settled modestly higher as light fund buying and spillover from corn and wheat bolstered prices, a floor source said.

 

December oats gained 1 1/4 cents to US$2.02 1/4 per bushel and March also ended 1 1/4 cents higher at US$2.08 1/4.

 

Ethanol futures finished unchanged to lower in light trading. October ethanol ended 4 cents lower at US$1.68 per gallon and November finished down 2.2 cents at US$1.673.