October 27, 2007

 

CBOT Corn Review on Friday: Ends up; holds gains on inflation-based buys

 

 

Chicago Board of Trade corn futures ended higher Friday, sustaining strong price support on inflationary-based buying and a lack of aggressive selling interest.

 

December corn ended 5 3/4 cents higher at US$3.72, and March finished 5 3/4 cents higher at US$3.88 3/4.

 

The only thing of significance in the corn market Friday was inflationary- based buying, as the market was swept up in broad-based gains seen in commodities in general, said Shawn McCambridge, senior grains analyst with Prudential Financial in Chicago.

 

Weakness in the U.S. dollar paved the way for speculative buying across commodities, analysts added. Meanwhile, an absence of hedge-related selling enabled corn to sustain most of its gains heading down the stretch, traders said.

 

The farmer seems to be putting the corn crop in the bin this year, as basis levels are firming in areas where harvesting is complete or near completion, McCambridge said. Farmers are looking back at last year and choosing to store some inventory in an effort to not leave money on the table, he added.

 

Meanwhile, the inability of nearby futures to push through resistance at the December contract's 200-day moving average coupled with crude oil and soybeans backing off its highs late attracted light profit taking to cap upside potential, analysts added.

 

During the next week to 10 days, the DTN Meteorlogix forecast calls for dry weather and normal to above-normal temperatures across the central U.S. This trend will be favorable for row-crop harvest in the western and northern Midwest. In the eastern Midwest, recent rains will help in terms of some soil- moisture re-charge after a very dry and hot late summer.

 

On tap for Monday, the U.S. Department of Agriculture is scheduled to release its weekly export inspections report 11 a.m. EDT and weekly crop progress report at 4 p.m. EDT.

 

In pit trades, speculative fund buying was estimated at 10,000 lots. Rand Financial bought 3,000 December, Fortis bought 400 December and Merrill Lynch bought 300 December. Fimat sold 500 December.

 

CBOT oat futures ended modestly higher on spillover support from neighboring and outside markets, a floor trader said. December oats closed up 1/2 cent at US$2.78 1/2 per bushel

 

Ethanol futures finished higher. November ethanol rose .008 cents to US$1.768 per gallon, and December closed up .005 at US$1.735.