December 24, 2005

 

CBOT Corn Review on Friday: Higher on funds, technicals, wheat

 

 

Corn futures traded at the Chicago Board of Trade ended higher Friday in a holiday-shortened trading session.

 

March futures extended their recent rally, settling at its highest level since Oct. 21 as light fund buying, spillover strength from the Wheat pit and technical buying helped support prices in the absence of fresh news, floor sources said. Volume was light than normal as some traders started their holiday early, they added

 

March corn rose 1 1/4 cents higher to US$2.14 per bushel, May corn also gained 1 1/4 cents to US$2.22 3/4 and July corn ended up 1 cent at US$2.30 3/4.

 

Wheat futures settled modestly higher, underpinned by fund short covering, traders said. The March contract advanced 3 3/4 cents to US$3.34 1/2 per bushel

 

Corn continues to act extremely well, a floor trader said, with the lack of a correction after recent strength a positive sign, he noted. This was the sixth consecutive session that March corn finished higher.

 

Several analysts noted that some participants were reluctant to go short this close to the end of the year, with some traders anticipating buying from index funds when the new year begins.

 

Index funds are unlike commodity trading funds in that they are "buy and hold" funds and do not attempt to trade the market. In 2005, these funds helped provide some support for agricultural futures early in the calendar year, sources said.

 

Buyers on Friday included Calyon Financial buying 2,300 March, O'Connor buying 1,500 March, Shatkin buying 1,000 March, Tenco buying 1,000 March and 300 July and FC Stonnee buying 500 March.

 

Sellers Friday included Cargill selling 1,000 March, Citigroup selling 1,000 March, Man Financial selling 600 March and 200 July, and O'Connor selling 600 July.

 

Commodity fund buying was estimated at 3,400 contracts.

 

Oat futures finished mostly higher with the March contract 1 cent higher at US$1.95 per bushel.

 

Ethanol futures settled mostly lower. The most-active April contract did not trade and fell 2 1/2 cents lower to US$1.95 per gallon.

 

The CBOT will be closed Monday due to the Christmas holiday and will re-open Tuesday, Dec. 27.