October 18, 2006

 

CBOT Corn Review on Tuesday: Up; speculators support market

 

 

Chicago Board of Trade corn futures ended at higher levels Tuesday, making new life-of-contract highs early in the session as speculative buying boosted prices, sources said.

 

December corn settled 4 1/4 cents higher to US$3.21 cents per bushel, and March gained 2 3/4 cents to US$3.29 1/4. e-CBOT day session volume in December was 55,561 contracts.

 

"There are more dollars than bushels and they are going into commodities," said Vic Lespinasse of AG Edwards & Sons.

 

There was nothing new out fundamentally but the market perceives the need for corn prices to go higher to attract additional acres for next year, a floor analyst said.

 

Projected robust demand from the domestic ethanol industry and from overseas importers has led to potential supply concerns despite U.S. farmers harvesting what is expected to be the third largest U.S. corn crop on record.

 

Spillover support from sharply higher wheat futures near the opening helped corn make new life-of contract highs in early trading, a floor trader said.

 

Wheat futures finished mixed.

 

The market took little notice of the weekly crop progress report, traders said.

 

The U.S. Department of Agriculture reported that 41% of the U.S. corn crop was harvested as of Oct. 15, in line within traders' expectations, but below the 48% cut in 2005 and the five-year average of 43%

 

On daily open auction technical charts, December's 14-day relative strength index stands at 77.07

 

Buyers Tuesday included Tenco, which bought 3,000 March, JP Morgan, which bought 2,000 December, 2,000 July, 800 March and 1,000 December 2007, RJ O'Brien, which bought 1,500 December and Rand, which bought 1,000 March.

 

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

 

Overall commodity fund buying was estimated at 7,000 contracts

 

Oat futures settled slightly higher in light trade with commission houses on both sides of the market, sources said. Although technical charts continue to look favorable the market consolidated at higher levels in range bound trade, a floor trader said.

 

December oats rose 1/4 cent to US$2.38 1/4 cents per bushel and March gained 1 cent to US$2.44.

 

Ethanol futures ended modestly higher in quiet trade. November settled .005 cent higher to 1.89 per gallon. December also rose .005 cent to US$1.89.