November 22, 2006

 

CBOT Corn Review on Tuesday: Shrugs off weakness, ends modestly higher

 

 

Chicago Board of Trade corn futures ended modestly higher Tuesday and near session highs, recovering late in the day from modest losses posted for most of the session.

 

December corn gained 1 1/4 cents to US$3.61 1/4 per bushel and March rose 2 1/4 cents to US$3.77 1/4. e-CBOT day session volume in March was 47,106 contracts.

 

Stronger soybean and wheat prices near the close helped corn end higher, sources said.

 

January soybeans settled 5 1/2 cents higher at US$6.73 and March wheat rose 8 cents to US$5.01 3/4.

 

Trading was slow for most of the day ahead of the holiday, but both wheat and soybeans firmed and corn traded higher as a result, a floor source said.

 

Activity in corn options also provided support with December corn options going off the board at the close. The options trade helped support corn, an analyst said. There are a lot of positions open at strike prices near "at the money," he added.

 

Going into Tuesday's trading session there were more than 26,000 December corn calls with open interest between the US$3.55 and the US$3.70 strike prices and over 10,000 open put positions in those strikes, according to the exchange's Web site.

 

Several floor traders cited stronger crude oil futures prices as also supporting the market late, with nearby crude oil futures over US$1 per barrel higher.

 

On daily open auction technical charts, March remained above its major moving averages.

 

Buyers Tuesday included Man Financial, which bought 500 December; FC Stone, which bought 300 December; and Rand Financial, which bought 300.

 

UBS sold 500 July; the USA Trading Division of Man Financial sold 500 March; and Man Financial sold 900 March and 500 July.

 

In spread trading, JP Morgan bought 1,300 Dec-Mar.

 

In options trading, Fortis sold 2,000 March US$3.80 calls and ADM Investor Services sold 1,000 January US$3.70 puts.

 

Oat futures settled little changed as the rolling out of December positions into March was the feature, sources said.

 

"Flat price trading was as slender as my waistline," a floor source said.

 

December oats settled 1/4 cent higher at US$2.55 1/2 per bushel and March also ended up 1/4 cent at US$2.68 1/4.

 

Ethanol futures settled higher in thin trade. The December contract settled 6 cents higher at US$2.18 per gallon. The January contract rose .082 cents to US$2.13.

 

On Wednesday, the CBOT will close at 12 p.m. CST and will be closed Thursday for Thanksgiving.