October 24, 2006

 

CBOT Corn Review on Monday: Settles higher; reverses early declines

 

 

Chicago Board of Trade corn futures settled higher Monday as losses set early in the session on spillover weakness from the overnight session faded on short covering and fund buying, sources said.

 

December corn rose 5 1/2 cents to US$3.18 1/4 per bushel and March gained 5 1/2 cents to US$3.30 1/4. E-CBOT day-session volume in December was 51,790 contracts.

 

"Nobody wants to miss the next leg of the rally," said Shawn McCambridge, senior grain analyst with Prudential Financial in Chicago.

 

People have been waiting to get into the market for the next rally and when the market tested support early in the session but held those levels, people saw that as a sign to get in the market, he added.

 

Spillover strength from stronger soybean and wheat futures also added to the upside, floor sources said. January soybeans rose 10 1/4 cents to US$6.30 1/2 and December wheat jumped 12 cents to US$5.17.

 

Weaker-than-expected export inspections had little impact on the market, floor sources noted.

 

The U.S. Department of Agriculture reported weekly corn export inspections were 27.557 million bushels, well below the 38-63 million bushels expected by analysts.

 

Commodity fund buying also added to the market's firm tonnee, sources said. Overall fund buying was estimated at 5,000 contracts.

 

On daily open auction technical charts, December traded an outside day, above and below the trading range established in Friday's session. December's 14-day Relative Strength index is 71.72.

 

Buyers on Monday included Tenco, which bought 1,000 March; JP Morgan, which bought 700 December and 800 July; Fimat, which bought 500 July; and Calyon, which bought 400 December.

 

Fimat sold 500 December, and UBS sold 500 July and 200 December.

 

In options trading, Man Financial bought 5,000 December 2007 US$3.50 calls.

 

Oat futures settled modestly higher in choppy trading. Hedge-related selling was offset by speculative buying, a local trader said.

 

December oats settled 1 1/4 cents higher at US$2.25 1/2 cents per bushel and March ended unchanged at US$2.30 3/4.

 

Ethanol futures ended higher in very thin trade. November settled up 4.5 cents higher at US$2.035 per gallon. December, which did not trade, rose 2.5 cents to US$2.015.

 

Monday afternoon, the USDA is scheduled to release the weekly crop progress report at 3 p.m. CDT (2000 GMT). Last week 41% of the U.S. corn crop was reported harvested, with analysts expecting 50%-54% of the crop combined as of Oct. 22.