November 4, 2009

 

CBOT Corn Review on Tuesday: Ends higher as funds continue to buy

 

 

Chicago Board of Trade corn futures ended higher Tuesday amid continued fund-buying and technical momentum, analysts said.

 

December corn ended up 7 3/4 cents, to US$3.90 per bushel, and March corn ended up 7 3/4 cents, to US$4.03 1/2. Prices ended about 6 cents off their highs for the day.

 

Funds bought 12,000 contracts, continuing a buying binge that took the market by storm late in Monday's session.

 

"Often it will take two or three days for fund-money to be committed when they've decided to make a position change," said Dave Marshall, a broker and commodity adviser in Nashville, Ill.

 

He added that it "didn't hurt" that Monday afternoon's crop progress report from the government showed only 25% of the crop was harvested. But fundamentals continue to take a back seat, traders and analysts say.

 

"The grain floor is a battle zone, with the fundamental bears on one side and the macro bulls on the other," MF Global says in a commentary.

 

Marshall noted that demand is "certainly nothing to crow about," and said the market's climb came even amid dry weather throughout the Midwest that is helping fields dry and harvest progress.

 

"You wouldn't always want to call the markets rational with the way they behave, based on what they can see out the window," he said.

 

Traders do note that weather is expected to be wetter next week, which could limit the drying and harvest window, particularly for corn, which in some cases will sit in the fields as farmers get their soy first.

 

A couple of traders said there might be positioning ahead of the Nov. 10 supply and demand estimates, as some expect the projected crop size to drop after a month of miserable weather in October.

 

CBOT oats futures were higher Tuesday. December oats ended up 2 3/4 cents, to US$2.57 per bushel, and March oats settled up 2 3/4 cents, to US$2.70 3/4.

 

Ethanol futures were mostly higher. November ethanol was down US$0.005, to US$1.950 per gallon, and December ethanol was up US$0.020, to US$1.865.