November 15, 2006

 

CBOT Corn Review on Tuesday: Ends sharply higher in technical rally

 

 

Chicago Board of Trade corn futures ended with strong gains Tuesday, shaking off early two-sided activity and recovering from recent losses on a speculative-led technical rally, sources said.

 

December corn settled 15 1/4 cents higher at US$3.57 1/4 cents per bushel and March gained 13 cents to US$3.71 1/2. e-CBOT day session volume in December was 97,551 contracts.

 

December didn't trade below Monday's low, and that encouraged speculative buying which touched off buy stops, a floor analyst said.

 

The fact that corn was able to trade above Monday's highs was a bullish indicator and led to fund related buying, said Brian Hoops, president of Midwest Market Solutions, in Yanktonne, S.D.

 

In addition, the Goldman roll out of December into the deferred months ended, which enabled December to gain on the deferred contracts which added additional support, he said.

 

People were waiting to see when the next rally would start and when market held support early Tuesday, some people saw it as the next leg of the rally and wanted to buy it, a commission house analyst said. The market just ran out of selling interest, he added.

 

On daily open auction technical charts, December ended above its major moving averages and near last week's highs.

 

Buyers Tuesday included ADM Investor Services, which bought 1,500 March, Citigroup, which bought 500 December, JP Morgan, which bought 500 March, and Fortis, which bought 500 December 2007.

 

Man Financial sold 1,500 March, ABN Amro sold 1,000 March and 600 December 2007, JP Morgan sold 500 March and 200 July. Overall commodity fund buying was estimated at 4,000 contracts.

 

In spread trading, ADM Investor Services bought 2,000 Jul.-Dec. 07.

 

In options trading, Advantage bought 15,000 December US$3.35 puts and sold 5,000 Dec. 2007 US$3.10 puts.

 

Oat futures ended mixed, recovering from steep losses set on commission house selling as spillover support from the rest of the floor enabled oat prices to recover, sources said. Oats have the least bullish fundamentals of any grain traded on the floor, and are following the other markets, a floor analyst said.

 

December oats slipped 1/2 cent to US$2.64 cents per bushel and March ended up 1/4 cent at US$2.74 3/4.

 

Ethanol futures settled mixed. The December contract didn't trade and settled unchanged at US$2.12 cents per gallon. The January contract also didn't trade and fell 1.5 cents to US$2.03.