November 15, 2007

 

CBOT Corn Review on Wednesday: Up on demand, speculative-based inflation buying

 

 

Chicago Board of Trade corn futures ended higher across the board Wednesday, rallying on demand and speculative-based inflationary buying, analysts said.

 

December corn ended 8 1/4 cents higher at US$3.83, and March finished 8 cents higher at US$4.00.

 

The corn market was a follower of outside markets, with the backdrop of fresh export demand providing a fundamental boost to keep prices underpinned throughout the day, a CBOT floor analyst said.

 

Technically based buying helped accelerate and sustain price strength, with fresh buying emerging amid the December contract's ability to eclipse resistance at Tuesday's high and the contract's 10-day moving average, analysts added.

 

Nevertheless, the market caught an inflationary attitude, with scattered end-user buying and reports of firming cash basis levels serving as catalysts to extend the bullish theme, traders said.

 

Additional support was generated from longer-term fundamental outlooks, as the market continues to look at the ensuing 2008 acreage battle with soybeans and wheat as motivators to keep deferred months up in unison with gains in neighboring grain and oilseed markets, analysts added.

 

The U.S. Department of Agriculture announced Wednesday private exporters reported the sale of 180,000 metric tonnes of corn for delivery to Egypt in the 2007-08 marketing year. USDA also said private exporters reported export sales of 106,680 metric tonnes of corn for delivery to Japan in the 2007-08 marketing year.

 

Meanwhile, the USDA's weekly export sales report normally released on Thursdays will be delayed until Friday due to Monday's Veterans Day holiday.

 

In pit trades, buyers and sellers were scattered among various commission houses, with Citigroup and Fortis each buying 500 March, and JP Morgan selling 300 March. Speculative fund buying was estimated at 8,000 lots.

 

Oat futures were little changed, with March closing slightly higher amid spillover support from firmer corn, a floor trader said. December oats settled flat at US$2.86 1/2 per bushel, while March finished up 3/4 cent at US$3.00 1/2.

 

Ethanol futures ended a bit higher. December ethanol rose .025 cent to US$1.855 per gallon, and January settled up .025 cent at US$1.77.