December 15, 2006

 

CBOT Corn Review on Thursday: Higher on light fund, technical buying

 

 

Chicago Board of Trade corn futures ended higher Thursday, shrugging off a private acreage estimate and early weakness as light fund and technical buying provided support, sources said.

 

December corn went off the board at 1 p.m. EST, 4 1/4 cents higher at US$3.58 3/4 per bushel. March gained 3 1/2 cents to US$3.71 3/4. e-CBOT day session volume in March was 50,487 contracts.

 

Corn futures traded both sides early in the session before news that Informa Economics estimated 2007-08 corn planted acreage at 85.922 million acres, up almost 7.4 million from the USDA's 2006 estimate moved prices modestly lower. Losses were short-lived, however, as March corn held technical support and light technical and fund buying helped corn move higher in modest activity, a commission house analyst said.

 

Fund buying was estimated at 3,500 contracts.

 

Strong weekly export sales also helped provide some strength to the market, a local trader said.

 

The U.S. Department of Agriculture reported weekly corn export sales totaled 1.51 million metric tonnes for the week ended Dec. 7, slightly above analyst estimates of 700,000 to 1.5 million tonnes.

 

Stronger crude oil futures helped support corn, the key ingredient in ethanol, the trader added.

 

The Informa estimate was in line with what people are saying the acreage will be and didn't have much of an impact, the commission house analyst added.

 

On open auction technical charts, March corn remains above its 40-day moving average but below its 10- and 20-day averages.

 

Buyers on Thursday included ADM Investor Services, which bought 2,000 December 2007; Man Financial, which bought 2,000 December 2007; Rand Financial, which bought 1,500 March; and the Stern division of Man Financial, which bought 2,000 December 2007.

 

Man Financial sold 800 March and the Stern division of Man Financial sold 3,000 December 2006.

 

In options trading, Rand Financial bought 1,000 February US$3.80 calls.

 

Oat futures settled with thin gains as light fund buying of May and December 2007 contracts steadied futures in a "holiday type" trading session, a local trader said. Spot month December expired at 12 p.m. CST at US$2.60 per bushel while March gained 3/4 cent to US$2.64.

 

Ethanol futures ended with light gains in quiet trade. The January contract settled 4.5 cents higher at US$2.285 per gallon. The February contract ended up 2 cents at US$2.23.