December 13, 2006

 

CBOT Corn Review on Tuesday: Posts modest gains in light trade

 

 

Chicago Board of Trade corn futures ended with modest gains Tuesday, unable to remain at higher levels set earlier in the session as the lack of additional buying interest trimmed the advances, sources said.

 

December corn settled 3 1/2 cents higher at US$3.59 per bushel and March rose 2 cents to US$3.72 3/4. e-CBOT day session volume in March was 51,761 contracts.

 

Spillover from Monday's rally and from higher prices in the overnight session set the stage for a stronger opening.

 

Light technical buying added to the gains, but the market was unable to move above its 20-day moving average on day-only technical charts.

 

The activity in corn was technically related, said Vic Lespinasse of AG Edwards & Sons. However, it is the end of the year and the trading was thin so it doesn't take much to move the market one way or the other, he added.

 

Near-term export news added some support to the market early in the session, floor sources said. The U.S. Department of Agriculture announced that South Korea purchased 220,000 metric tonnes of U.S. corn for delivery in 2006-07 and Egypt purchased 120,000 tonnes with half for delivery in 2006-07 and half for delivery in 2007-08.

 

On open auction technical charts, the 14-day relative strength index for March corn stands at 54.32.

 

Buyers Tuesday included ADM Investor Services, which bought 500 March, JP Morgan, which bought 600 March, and Man Financial, which bought 200 March.

 

Rand Financial sold 600 March, Fimat sold 300 March, and Calyon sold 200 March.

 

Overall fund buying was estimated at 1,000 contracts.

 

In options trading, UBS bought 2,000 March US$3.80 calls and 1,000 May US$3.80 calls.

 

Oat futures settled with modest gains as fund buying in the deferred months supported prices across the board, a floor trader said. The funds continue to support the market, but oats remain in a sideways trading range, he added.

 

December oats finished 3 1/2 cents higher to US$2.56 per bushel and March settled up 3 1/4 cents to US$2.65 1/2.

 

Ethanol futures settled lower in very thin trade. The January contract slipped 0.005 cents to US$2.245 per gallon. The February contract didn't trade and ended down 1 cent at US$2.195