September 29, 2006

 

CBOT Corn Review on Thursday: Strong gains on funds, technicals, wheat

 

 

Chicago Board of Trade corn futures settled with strong gains in heavy trading Thursday, making new highs on the close as fund buying, thought to be end-of-month and end-of-quarter positioning pushed prices higher, floor sources said.

 

December jumped 10 1/2 cents to US$2.64 1/4 cents per bushel, and March rallied 9 3/4 cents to US$2.77 1/2. e-CBOT day session volume in December was 95,700 contracts.

 

The funds are supporting their positions as the recent fundamentals haven't changed, a floor analyst said.

 

Overall fund buying was estimated at 12,500 contracts.

 

Technical buying, with December pushing above resistance near the US$2.61 level, also added to the gains with December settling at its highest level in almost two months.

 

Spillover from soaring wheat values also bossted prices, a floor trader said. December wheat settled 21 1/4 cents higher at US$4.45 1/2.

 

"The gains in wheat contributed to the rally in corn," said Sid Love, of Kropf and Love Consulting in Overland Park, Kan.

 

In addition, some people are thinking that Friday's corn stocks number could be down by as much as 100 million bushels, he said. "If that's the case, it tightens up the supply," Love said.

 

In a Dow Jones Newswire survey of 14 analysts the average 2005-06 quarterly stocks estimate was 1.967 billion bushels, below the 2.012 ending stocks figure in the Sept. 12 U.S. Department of Agriculture supply and demand report. The USDA is scheduled to release the Quarterly stocks report on Friday at 7:30 a.m. CDT (1230 GMT).

 

The USDA reported weekly corn export sales at 829,700 metric tonnes for the week ended Sept. 21, within the range of analysts' estimates. Exports were decent but nothing spectacular, a floor source said.

 

On day-session open auction technical charts, December settled above its major moving averages and the contract's 14-day relative strength index stands at 65.11. A reading over 70 indicates overbought conditions.

 

Buyers Thursday included ADM Investor Services, which bought 1,600 December, ABN Amro which bought 1,000 December, Fimat, which bought 500 December and Rand, which bought 500 December.

 

RJ O'Brien sold 1,000 December, Man Financial sold 800 December, Prudential sold 500 December and ABN Amro sold 600 December.

 

In spread trading, Fimat bought 3,000 March-December.

 

Oat futures settled higher as fund and technical buying along with spillover from corn and wheat boosted prices, an oat local trader said. March oats made a new life of contract high.

 

December oats settled 2 1/2 cents higher at US$2.06 1/2 per bushel and March gained 3 cents higher to US$2.13.

 

Ethanol futures ended mixed in thin activity. October ethanol rose 3 cents to US$1.75 per gallon and November gained 6.2 cents at US$1.785.