November 11, 2009

 

CBOT Corn Review on Tuesday: Prices climb late as funds buy

 

 

Chicago Board of Trade corn futures ended higher Tuesday amid spread trading and a late surge of fund-buying, traders said.

 

December corn ended up 8 1/2 cents at US$3.94 1/2 per bushel, and March corn ended up 8 3/4 cents at US$4.09.

 

Traders and analysts could pinpoint no fundamental reason why the market rallied late. The market was lower for much of the morning but climbed back to unchanged by midday.

 

"After that, the guys who were selling it early were covering late, and you had fund money coming in," said Jim Riley, analyst for Linn Group.

 

Funds, which in the words of one trader were "buying the hell out of it" late, bought an estimated 7,000 contracts.

 

Corn did not have outside market help from crude oil or the dollar. Traders said there was buying of corn and selling of wheat and soy. Eventually, they said, corn helped those markets erase losses.

 

Traders and analysts said that while Tuesday's supply and demand and crop estimates from the U.S. Department of Agriculture were a little friendly, that was already priced into the market after Monday's 20-cent gains. The USDA cut the projected size of the corn crop and 2009-10 carryout slightly more than the average trade estimate.

 

Analysts say the harvest, although still behind schedule, is picking up due to dry weather and the fact that farmers are mostly done with their soy. That should weigh on the market in the days ahead, they said.

 

Traders are split on the market's technical position. A couple market participants said that the market appeared to be range-bound and could stay that way.

 

"I think the (USDA) report suggested corn should stay in a US$3.50-to-US$4 range," said Joel Karlin, analyst for Western Milling.

 

CBOT oats futures were mostly higher Tuesday. December oats ended up 5 1/4 cents at US$2.63 3/4 per bushel and March oats ended up 5 1/4 cents at US$2.77 1/4.

 

Ethanol futures were higher. December ethanol was up US$0.029 at US$1.944 per gallon and January ethanol was up US$0.021 at US$1.877.