November 3, 2007

 

CBOT Corn Review on Friday: Climbs on crude oil, gold surge

 

 

Chicago Board of Trade corn futures settled moderately higher Friday as surging energy and metals prices helped the market rally, an analyst said.

 

December corn rallied 8 1/4 cents to US$3.77 per bushel.

 

The outside-market strength was the opposite of what occurred Thursday and corn rallied as a result, said Vic Lespinasse, analyst at Illinois Grain.

 

Crude oil surged, jumping more than US$2 per barrel, and gold futures made a new 28-year high. A weaker U.S. dollar provided additional support as it makes U.S. agricultural exports cheaper to foreign buyers, a commission house analyst said.

 

Ideas that recent losses were overdone also helped limit selling interest early in the session, the commission house analyst said.

 

Crop production estimates from FCStonnee and Informa were "not overtly bullish but certainly not bearish" as both were below the October USDA estimate, Lespinasse said. Thursday afternoon, brokerage firm FCStonnee estimated 2007 U.S. corn production at 13.240 billion bushels with a yield of 153.8 bushels per acre. Friday, Informa Economics estimated the crop at 13.193 billion bushels and a yield of 153.3 bushels per acre.

 

Technical buying also contributed to the upside gains, a trader said. December traded over the US$3.80 level for the first time since late September but ended below it.

 

On daily technical charts, electronically traded December settled above its 200-day moving average.

 

Price direction on Monday depends on the outside inflationary markets and what happens in Sunday night's session, an E-CBOT trader said.

 

Commodity fund buying was estimated at 7,000 contracts.

 

In options trading, Tenco bought 2,000 March US$3.70 puts and sold 2,000 March US$4.10 calls.

 

Oat futures settled with good-sized gains as speculative-type buying pushed prices higher, an analyst said. Fund buying supported the market all day, the analyst added. March set a new life-of-contract high.

 

December oats settled 6 1/4 cents higher at US$2.93 per bushel and March gained 5 1/2 cents to US$3.06.

 

Ethanol futures ended higher. November ethanol gained 2.5 cents to US$1.82 per gallon and December rose 5.5 cents to US$1.78.

 

Friday afternoon, the Commodity Futures Trading Commission is scheduled to release the commitment of traders data for the period ending Oct. 30.

 

Monday afternoon, the U.S. Department of Agriculture is scheduled to release the weekly crop progress report.