December 22, 2007

 

CBOT Corn Review on Friday: Rallies to new highs on speculative buying

 

 

Chicago Board of Trade corn futures ended moderately higher Friday but down from new life-of-contract highs set earlier in most months.

 

March corn settled 6 cents higher at US$4.43 1/2 per bushel, after trading as high as US$4.48.

 

Speculative buying helped move the market higher as money continues to enter the grain markets, a commission house analyst said. Commodity fund buying was estimated at 6,000 contracts in open auction trading.

 

The funds were active buyers Friday and that kept short sellers on the sidelines, said Shawn McCambridge, senior grain analyst at Prudential Financial.

 

A move to new contract highs in soybeans added to the upside, the commission house analyst said. March soybeans settled 16 1/4 cents higher to US$11.96 per bushel, just off the new high of US$11.96 1/2.

 

Corn and soybeans are both fighting for acreage this spring and when soybeans rally, corn prices need to increase, the analyst said.

 

Additional support came from sharp gains in crude oil futures as higher prices support corn via ethanol, a trader said. February crude oil ended US$2.27 higher at US$93.33 per barrel.

 

On daily technical charts, electronically traded March corn settled above its major moving averages with the 14-day Relative Strength Index at 74.58.

 

In options trading, Tenco bought 1,000 February US$4.60 calls and FC Stonnee bought 1,000 February US$4.00 calls.

 

Oat futures settled with modest gains, supported by light speculative buying in quiet pre-holiday trade, an analyst said.

 

March oats settled 2 1/4 cents higher to US$3.05 1/2 per bushel.

 

Ethanol futures finished higher. January ethanol rose 4 cents to US$2.22 per gallon while February rallied 5 cents to US$2.15.