December 5, 2007

 

CBOT Corn Review on Tuesday: Climbs to 5-month highs on technical, speculative buys

 

 

Chicago Board of Trade corn futures ended higher across the board Tuesday, with technically inspired speculative buying propelling futures to their highest levels in over five months.

 

December corn ended 8 cents higher at US$3.94, and March finished 7 3/4 cents higher at US$4.11 1/4.

 

The combination of technical strength, good export demand, and talk of the potential for further expansion of the ethanol industry in a variation of a proposed U.S. energy bill provided strength to keep sellers away from the market, said Shawn McCambridge, senior grains analyst with Prudential Financial in Chicago.

 

The ability of nearby futures to push above recent highs attracted follow-through buying, allowing futures to build on technical strength, traders said. In addition, good underlying demand, with a large sale of U.S. corn reported to Mexico, provided further support to inspire speculative buying, analysts added.

 

The most active March contract climbed to its highest level since June 21, and analysts said it does not take much conviction to move prices in thin end-of-the-year trading.

 

The U.S. Department of Agriculture announced Tuesday private export sales of 545,084 metric tonnes of U.S. corn for delivery to Mexico.

 

The DTN Meteorlogix weather forecast said thundershowers and cooler temperatures are expected to boost crops in the northern and eastern regions of Argentina on Wednesday and Thursday. Friday and Saturday are forecast drier, with only a few light showers expected.

 

In pit trades, JP Morgan, Citigroup, and RJ O'Brien each bought 300 March, and MF Global bought 1,000 March. Sellers were lightly scattered among various commission houses.

 

CBOT oat futures settled higher as fund and commercial buying supported prices, a trader said.

 

"The funds had their buying shoes on," the trader said.

 

March oats rallied 3 3/4 cents to US$2.79 1/4 per bushel.

 

CBOT ethanol futures ended higher. December ethanol settled up 3 cents to US$1.98 per gallon and January rose 4 cents to US$1.87.