December 1, 2006

 

CBOT Corn Review on Thursday: New highs set in choppy trade

 

 

Chicago Board of Trade corn futures settled higher and at new life-of-contract highs in some months Thursday after a tumultuous last hour of trading.

 

December corn settled 6 3/4 cents higher at US$3.77 cents per bushel and March gained 5 1/4 cents to US$3.90 1/2. E-CBOT day-session volume in March was 71,120 contracts.

 

Futures rallied to new session highs in several months early in the session supported by higher outside markets and a weaker dollar. Firm weekly export sales and supportive overnight prices also added to the gains, sources said.

 

The U.S. Department of Agriculture reported weekly corn exports were 1.021 million metric tonnes for the week ending Nov. 23.

 

For most of the session, "everything was going corn's way," said Vic Lespinasse of AG Edwards & Sons.

 

Stronger wheat futures also added to the gains. March wheat gained 10 cents to US$5.21 1/2 cents per bushel.

 

Gains were erased late in the session as a large order made on e-CBOT precipitated a sharp decline, with technical selling adding to the losses.

 

However, a furious rally near the close propelled the nearby months to new life-of-contract highs in the absence of selling interest.

 

On continuous monthly charts, nearby corn traded at its highest level since August 1996.

 

Buyers on Thursday included Tenco, which bought 1,000 March; JP Morgan, which bought 700 March and 300 December; and Calyon Financial, which bought 500 July.

 

JP Morgan sold 800 July and 700 March and Tenco sold 500 July.

 

Commodity fund buying was estimated at 4,000 contracts.

 

In spread trading JP Morgan bought 2,500 December-March.

 

In options trading, Man Financial bought 1,000 December 2007 US$2.90 puts and sold 1,000 December US$2.80 puts.

 

Oat futures ended higher in two-sided trade as the market followed corn and wheat futures in choppy trading, a floor trader said.

 

December oats ended 6 3/4 cents higher at US$2.56 3/4 cents per bushel and March gained 5 cents to US$2.69.

 

Ethanol futures settled higher in thin trading. The December contract rose 1.5 cents to US$2.275 cents per gallon. The January contract settled 2 cents higher at US$2.23.