November 25, 2006

 

CBOT Corn Review on Friday: Ends higher on technicals, new highs set

 

 

Chicago Board of Trade corn futures settled higher Friday with some contracts establishing new life-of-contract highs in a shortened trading session after the Thanksgiving Day holiday. March, May and July all notched new contract highs.

 

December corn gained 6 1/2 cents higher to US$3.69 1/4 cents per bushel and March rose 7 3/4 cents to US$3.86. e-CBOT day session volume in March was 28,877 contracts.

 

"It's a market that saw technical buying coming in across the board," said Don Roose, president of US Commodities in West Des Moines, Iowa. In addition, energy and metals markets were higher so corn was supported by bio-fuel and inflationary concerns, Roose said.

 

The market has a bullish stance and it was thin after the holiday so it didn't take much to move prices higher, he noted.

 

Spillover support from stronger wheat and soybean futures also added to the gains, with a floor source noting the surprise wasn't that corn was higher but that is was following the other grains.

 

March wheat rallied 12 3/4 cents to US$5.19 and January soybeans gained to 10 1/4 cents to US$6.84 1/4, with new life-of-contract highs set across most of the board in soybeans.

 

There was little fresh news out to impact the market. The U.S. Department of Agriculture reported weekly U.S. corn export sales totaled 1.04 million metric tonnes for the week ended Nov. 16, slightly below the 1.1 million to 1.4 million tonnes expected by analysts.

 

On daily open auction technical charts, March settled above its major moving averages and its 14-day relative strength index stands at 73.67.

 

Buyers Friday included ADM Investor Services, which bought 500 December 2007, Citigroup, which bought 500 December 2007, ABN Amro, which bought 400 July, and Fortis, which bought 300 December 2007.

 

Fortis sold 1,000 July, JP Morgan sold 500 December and 200 July, and DM Investor Services sold 400 December.

 

Commodity fund buying was estimated at 2,000 contracts.

 

In options trading RJ O'Brien bought 1,500 May US$2.90 puts.

 

Oat futures ended with modest gains supported by the strength in wheat and corn futures, a floor trader said. Activity was light, but spillover from the other pits underpinned oats, he added.

 

December oats settled 2 3/4 cents higher to US$2.57 1/2 cents per bushel and March also gained 2 3/4 cents to US$2.70 3/4.

 

Ethanol futures settled little changed. The December contract didn't trade and ended up 1/2 cent per gallon at US$2.17 1/2 cents per gallon. The January contract also didn't trade and finished unchanged at US$2.125.

 

On Monday, the weekly export inspections are scheduled for release at 10:00 a.m. CST and the weekly crop progress report is expected out at 3:00 p.m. CST (2100 GMT). In addition, the Commodity Futures Trading Commission is expected to release the weekly commitment of trader's report Monday afternoon. The report is delayed a day due to the holiday.