October 30, 2007

 

CBOT Corn Review on Monday: Settles higher as commodities rally

 

 

Chicago Board of Trade corn futures settled moderately higher Monday, as spillover from outside markets, strong wheat and soybean prices and technical buying buoyed values.

 

December corn settled 4 cents higher at US$3.76 and March rose 4 1/4 cents to US$3.93 per bushel.

 

"The corn market was influenced by the strength in outside markets," said Don Roose, president of US Commodities in West Des Moines, Iowa. Crude oil prices gave corn a boost from the ethanol angle, and stronger gold and silver prices gave corn a push from inflationary buying, he said. Nearby crude oil ralled to another new all-time Monday.

 

Speculative technical buying added to the gains, with spot-month December trading above its 200-day moving average for the first time since early October.

 

Stronger wheat and soybean prices also added to the positive tonnee, an analyst said. Wheat prices have been a big influence on corn, and when nearby wheat traded limit-up, that added to corn's gains, the analyst said. December wheat settled 28 1/2 cents higher at US$8.28 1/2 per bushel. January soybeans settled up 15 1/2 cents at US$10.28 3/4 per bushel.

 

There was little fresh fundamental news out, but the harvest is winding down and producers are limiting sales leaving end-users searching for supplies, said Roose.

 

Corn's price direction Tuesday will depend on the outside markets, with participants looking ahead to the Federal Reserve meeting on Wednesday for clues about direction of interest rates, a trader said.

 

In open auction trading commodity fund buying was estimated at 5,000 contracts.

 

In options trading, FCStonnee bought 1,000 December US$3.60 calls, and JP Morgan bought 1,000 December US$3.50 puts.

 

Oat futures settled higher as early fund-based buying and spillover from the rest of the grains boosted oats, a commission house analyst said.

 

December oats ended 6 1/4 cents higher at US$2.84 3/4 per bushel.

 

Ethanol futures settled with small gains. December ethanol rose 1.5 cents to US$1.75 per gallon and January gained 2.4 cents to US$1.759.

 

Monday afternoon, the U.S. Department of Agriculture is scheduled to release the weekly crop progress report for the week ended Oct. 28. Analysts expect 70-75% of the U.S. corn crop to be harvested.