December 27, 2006

 

CBOT Corn Review on Tuesday: Ends up; rallies on technical inspired buying

 

 

Corn futures on the Chicago Board of Trade ended higher Tuesday, rallying to over 3-week highs on technically inspired buying, analysts said.

 

March corn ended 4 cents higher at US$3.88 per bushel, and May gained 3 3/4 cents to US$3.95 1/4.

 

The market is technically strong and with long term bullish demand outlooks, speculative funds remain comfortable trading from the long side on the market, analysts said.

 

The absence of fresh fundamental news kept attention focused on bullish technical momentum, as buyers remain in control of price direction, traders added.

 

Aside from technical incentives, futures garnered strength from higher Asian markets overnight. The bullish theme was consistent throughout the day, as outlooks for tightening supplies in 2007 amid increased demand helped promote the higher trend, a trader added.

 

The Commodity Futures Trading Commission said speculative funds were net long 294,233 combined CBOT corn futures and options contracts as of Dec. 19, compared with net longs of 291,875 in the previous week. Meanwhile, commercials are net short 187,041, compared to net shorts of 190,957 contracts in the previous week.

 

U.S. Department of Agriculture reported 37.601 million bushels of corn were inspected for export in the week ended Dec. 21. The export figure is down 7.6% from the previous week's 40.675 million bushels. Analysts surveyed by Dow Jones Newswires projected the inspections to fall within a range of 37 million to 44 million bushels. Accumulated corn inspections total 692.603 million bushels, up 20.3% from the 575.677 million bushels reported at the same time last year.

 

The DTN Meteorlogix weather forecast said South Africa's corn crop areas had rainfall of up to one and one-half inch during the weekend; very beneficial to crops. Continued showers are in store for this week as well, keeping the crop weather situation favorable for corn in South Africa.

 

In pit trades, UBS Securities bought 1,000 December, RJ O'Brien bought 500 March, Fimat bought 400 March and Citigroup bought 300 September and 300 December. Rand Financial sold 1,000 July, and UBS Securities sold 400 December. Speculative fund buying was estimated near 3,000 contracts.

 

CBOT oat futures ended higher on late commission house buying, sources said. There also was early fund buying in the Marcha contract and some fund selling in the May contract, a trader added.

 

March oats settled 2 3/4 cents higher at US$2.76 3/4 per bushel and May ended up 1/4-cent at US$2.79 3/4.

 

Ethanol futures ended lower. The January contract slipped .027 lower at US$2.363 per gallon. The February contract moved .013 lower at US$2.282.