December 15, 2007

 

CBOT Corn Review on Friday: Up on technical buys; sets new highs

 

 

Chicago Board of Trade corn futures ended higher Friday, securing new contract highs on the backs of technical buying and underlying demand.

 

December corn ended 1 1/4 cent higher at US$4.20, and March finished 3 1/4 cents higher at US$4.38 1/4.

 

The market was bolstered by technical momentum, with a supportive demand base from domestic to exports serving as catalysts to keep futures probing at contract highs, analysts said.

 

Futures satisfied a near-term technical objective of piercing through resistance at previous highs, with spillover strength from neighboring grains, fresh export demand and news of the potential for a new supportive mandate for biofuels providing bullish underlying strength, analysts added.

 

Otherwise, activity was fairly subdued, with a lack of sellers opening the door for futures to push above prior contract highs. Meanwhile, weakness in outside inflationary markets limited upside potential with declines in crude oil and metals as well as a stronger U.S. dollar offsetting some of the bullish tonnee, traders said.

 

In other news, the U.S. Department of Agriculture announced Friday private export sales of 158,496 metric tonnes of corn for delivery to Japan in the 2007-08 marketing year.

 

Private analytical firm Informa Economics on Friday pegged 2008 U.S. corn plantings at 87.4 million acres, traders said. The firm's corn acreage estimate is down from the 93.6 million acres seeded by U.S. farmers in 2007-08, according to the U.S. Department of Agriculture.

 

Rain early Friday across Argentina's agricultural heartland provided a timely boost to the young corn crop which had been starting to show signs of moisture stress, the Buenos Aires Cereals Exchange said in its weekly crop report Friday. The rainfall will allow farmers to plant fields they had put off seeding due to the dry weather, the exchange said.

 

The DTN Meteorlogix weather forecast said Friday's long-range charts suggest a better chance for thundershowers to develop in the western and northern crop areas of Argentina late next week or next weekend. The early indications suggest that this would include La Pampa, Cordoba, Santa Fe and northern Buenos Aires. This is a more favorable weather trend, especially for pollinating corn, Meteorlogix said.

 

In pit trades, buyers and sellers were scattered among various commission houses, with speculative fund buying estimated at 1,000 lots.

 

CBOT oat futures ended mostly higher. March oats finished up at US$3 1/4 cents at US$2.97 3/4 per bushel, while December oats expired 8 1/2 cents lower at US$2.79.