November 2, 2006

 

CBOT Corn Review on Wednesday: Sharply higher; march sets new high

 

 

Chicago Board of Trade corn futures settled with strong gains Wednesday as speculative buying boosted prices, sources said.

 

December corn jumped 12 3/4 cents to US$3.33 1/2 cents per bushel and March settled 12 1/4 cents higher at US$3.47. E-CBOT day-session volume in December was 64,150 contracts.

 

December corn futures equaled their contract high and March set a new life-of-contract high on the close.

 

Corn was oversold short term on daily technical charts and due for a bounce after Tuesday's losses, a floor analyst said.

 

It was the first trading day of the month and corn saw good buying interest, thought to be additional money allocated to commodities from the funds, he added.

 

"The story in corn hasn't changed," said Vic Lespinasse of A.G. Edwards & Sons. The market remains concerned that the U.S. Department of Agriculture will reduce the size of the U.S. corn crop in next week's crop production report, he said.

 

Demand from the ethanol industry next year is expected to sharply increase the amount of corn and the market is concerned about the need to increase acreage to meet the demand.

 

In addition, the market is also looking toward several private firms' corn crop estimates Wednesday afternoon and Thursday morning that some traders expect will show a decline in production ahead of next week's report, he added.

 

On open-auction technical charts, December settled above its major moving averages, and the 14-day relative strength index in December is 70.25.

 

Buyers on Wednesday included Fortis, which bought 3,000 December; ABN Amro, which bought 1,500 March; JP Morgan, which bought 1,000 July and 400 December; and Calyon Financial, which bought 500 December.

 

ADM Investor Services sold 6,000 December, JP Morgan sold 1,000 December, Citigroup sold 800 July and Rand Financial sold 500 March and 200 December.

 

Oat futures settled higher, supported by the strong gains in corn futures, sources said. Oats followed corn higher Wednesday, a local trader said.

 

December oats rose 9 3/4 cents to US$2.43 3/4 cents per bushel and March settled 7 3/4 cents higher at US$2.52 3/4.

 

Ethanol futures ended higher in light trading. November settled up 1 cent to 2.025 cents per gallon and December gained 4.5 cents to US$2.025.

 

On Thursday, the USDA is scheduled to release the weekly export sales report at 7:30 a.m. CST (1330 GMT). Analysts expect sales between 900,000-1.1 million metric tonnes following last week's sales of 1.046 million tonnes.