December 20, 2006

 

CBOT Corn Review on Tuesday: Settles higher as funds buy

 

 

Chicago Board of Trade corn futures Tuesday settled higher, bouncing back from Monday's weakness in modest trading, sources said.

 

March corn settled 7 1/4 cents higher at US$3.73 and May corn rose 7 cents to 3.80 3/4. e-CBOT day session volume in March was 51,777 contracts.

 

"The rally began late in Monday's session and carried over into Tuesday's trade," said Vic Lespinasse, with AG Edwards & Sons.

 

The funds were buyers in a reversal from Monday with stronger crude oil and a weaker dollar also contributing to the buying interest, he added.

 

A rebound to higher levels in wheat futures also provided some support, with technical buying adding to the price gains, a commission house analyst said. The path of least resistance was higher as the bears could not make much headway to the downside, he added.

 

Fund buying was estimated at 3,500 contracts.

 

The only thing missing from the rally was volume and that is typical this time of year, Lespinasse said.

 

Now that March corn finished above US$3.72, some market participants are expecting it to make a run up to US$3.76 and then US$3.80, a floor broker said.

 

On open auction technical charts, March corn traded within its 20-day and 40-day moving averages but settled above its 10-day moving average for the first time since Dec. 1.

 

Buyers Tuesday included ABM Amro, which bought 1,000 March, Citigroup, which bought 1,000 March and JP Morgan, which bought 400 March.

 

Man Financial sold 200 March.

 

In spread trading Citigroup bought 1,000 Dec.-July and Prudential bought 500 Dec.-July.

 

In options trading, Rand Financial bought 800 May US$4.00 calls.

 

Oat futures settled higher, boosted by fund and technical buying in active trade, a floor trader said. The funds and commission houses were buying oats Tuesday, he added.

 

March oats settled 9 3/4 cents higher at US$2.69 3/4 per bushel and May gained 5 cents to US$2.72.

 

Ethanol futures ended unchanged to lower in light activity. The January contract settled unchanged at US$2.35 per gallon. The February contract did not trade and settled 3 cents lower at US$2.22.