December 13, 2005

 

CBOT Corn Review on Monday: Higher on soy spillover, funds

 

 

Corn futures at the Chicago Board of Trade settled at higher levels Monday but were off from the day's highs as spillover strength from the soy complex and heavy fund buying supported prices, traders said.

 

December corn rose 4 1/2 cents to US$1.94 1/4, March rallied 4 cents to US$2.07 3/4, and May advanced 4 1/4 cents to US$2.16 3/4 per bushel.

 

"Corn followed the soy complex market for most of the session," said Shawn McCambridge, senior grains analyst with Prudential Financial in Chicago. Monday's rally was really set up by Friday's trading, he said, with March corn trading an outside day Friday on technical charts, setting a new contract low on bearish ending stocks data before rallying to finish higher.

 

CBOT January soybeans traded above the US$6.00 level briefly before ending 15 1/4 cents higher at US$5.84 a bushel. January soymeal added US$7.10 to US$188.00 per short tonne.

 

Technical buying, thought to be fund short covering, once March corn breached the US$2.07 per bushel level, pushed the market to the highs of the day, sources said.

 

The technical buying abated after March was unable to push through the US$2.10 level, and profit-taking emerged to trim some of the gains.

 

On technical charts, March gapped higher on the open and finished above its 10-day and 20-day moving averages.

 

Commodity fund buying was estimated at 15,000 contracts.

 

Sharply higher precious metals and petroleum prices also added to the early rally. Gold futures on the Comex division of the New York Mercantile Exchange rose to a 25-year high early on before retreating to post small-scale gains.

 

Several traders noted dry conditions in parts of Argentina, a major competitor to the U.S. in world corn export markets, as a contributing factor to Monday's gains as well.

 

Export inspections were released during the session and were 33.4 million bushels, just above the low end of the range of analyst's estimates.

 

In trade action, ADM bought 1,500 March, FC Stonnee bought 1,200 March, Fimat bought 5,500 March, Rand Financial bought 3,000 March, and Man Financial bought 1,000 March and 500 May.

 

On the sell side, Cargill sold 3,000 March, R.J. O'Brien sold 4,500 March, Man Financial sold 2,500 March, Tenco sold 1,500 March and ADM sold 500 March.

 

Oat futures settled moderately higher on spillover from the rest of the floor with the March future gaining 6 1/4 cents to US$2.05 a bushel.

 

Ethanol futures ended mixed. The most-active April contract did not trade and slipped 1 cent to US$1.99 per gallon.