October 5, 2006

 

CBOT Corn Review on Wednesday: Rallies sharply on wheat, soy, technicals

 

 

Chicago Board of Trade corn futures settled sharply higher in active trading Wednesday, rallying late in the session as wheat exploded to the upside and soybean futures ended with strong gains, floor sources said.

 

December corn jumped 10 1/4 cents higher to US$2.74 1/4 cents per bushel, and March rallied 9 1/2 cents to US$2.87 1/2. e-CBOT day session volume in December was 69,024 contracts.

 

"There was a lot of spillover buying from wheat and soybeans in the corn market," said Brian Hoops, president of Midwest Market Solutions in Yankton, S.D.

 

The gains accelerated after December took out stops around US$2.65 and additional buying emerged after moving above the double-top near US$2.69 1/2 and just exploded to the upside. Late hedge-related selling helped trim some of the gains, Hoops said.

 

December wheat futures jumped 25 1/2 cents to US$4.65 per bushel and November soybeans settled 12 3/4 cents higher at US$5.55 1/4.

 

News late Tuesday from the U.S. Department of Agriculture that the October crop production report would include changes to harvested average in South Dakota, Georgia and Alabama due to dry weather created some anxiety in the market, a commercial-connected trader said. The report is scheduled for release Oct. 12.

 

Fundamentally, there has not been much fresh news, corn is harvesting and has been a follower of wheat and outside markets, a floor trader said.

 

On open auction technical charts, December gapped open higher and traded to its highest level since mid-July. December's 14-day Relative Strength Index stands at 68.47.

 

Buyers Wednesday included Fortis, which bought 2,500 December; Man Financial, which bought 1,500 December; UBS, which bought 1,000 December; RJ O'Brien, which bought 700 December; and JP Morgan, which bought 500 December.

 

Man Financial sold 3,000 March; Goldenberg-Hehmeyer sold 1,500 December; UBS sold 1,500 December; Rosenthal sold 1,200 December; Tenco sold 500 March and 500 July; and Fimat sold 700 July.

 

Funds were noted as both buyers and sellers and were thought to be net buyers on the session.

 

Oat futures ended at higher levels as spillover support from the sharp gains in wheat and corn supported oat prices, a commission house analyst said. March oats made a new life- of-contract high.

 

December oats gained 3 cents to US$2.09 3/4 per bushel and March rose 3 1/2 cents to US$2.17 3/4.

 

Ethanol futures ended mixed in thin trade. October ethanol slipped 1 cent to US$1.802 per gallon and November gained 0.8 cent to US$1.805.

 

On Thursday, the USDA is scheduled to release the weekly export sales report for the period ending Sept. 28 at 7:30 a.m. CDT. Analysts forecast corn sales at 800,000-1.0 million metric tonnes. Sales for the week ended Sept. 21 totaled 829,700 tonnes.