December 28, 2005

 

CBOT Corn Review on Tuesday: Late buying supports prices

 

 

Corn futures traded at the Chicago Board of Trade finished higher on Tuesday for the seventh straight trading session, making new highs on the close in choppy trading, sources said.

 

March corn settled up 1 1/2 cents at US$2.15 1/2 per bushel, May corn also ended 1 1/2 cents higher at US$2.24 1/4, and July corn rose 1 1/2 cents to US$2.32 1/4 per bushel.

 

Futures opened higher on fund buying, thought to be short covering, and extended their early advances to trade at levels not seen since mid-October. The futures then reversed course and moved below Friday's closing prices as a lack of additional buying and weaker soy meal and soybean futures helped push corn lower, traders said.

 

A lack of fresh news and modest order flow, with some firms having closed their books ahead of the new year also limited activity, sources said.

 

Near midday, corn staged a mild recovery as a rebound in wheat futures led locals to cover their short positions, a floor trader said.

 

Corn futures continued to meander between small gains and losses until near the close when late buying interest as well as rebounding soy meal and soybean futures helped support prices, traders said.

 

The U.S. Department of Agriculture reported export inspections were 31.102 million bushels for the week ended Dec. 15, below the 37-44 million bushels expected by analysts. The report had little impact.

 

On technical charts, March corn settled above resistance at US$2.15 per bushel and near its 100-day moving average of US$2.17.

 

Buyers on Tuesday included Iowa Grain buying 2,000 March, Man Financial buying 2,500 March, Cargill buying 1,000 March ABN Amro buying 800 March and the Refco division of Man Financial buying 500 March.

 

Sellers Tuesday included FC Stonnee selling 500 March and 200 July, Calyon Financial selling 600 March, Citigroup selling 500 March, the Refco division of Man Financial selling 1,000 March and Kottke selling 500 March.

 

Commodity fund buying was estimated at 4,500 contracts.

 

Oat futures settled mixed with the March contract 1 1/4 cents lower at US$1.93 3/4 per bushel.

 

Ethanol futures ended mostly higher. The most-active April contract did not trade and gained 6 cents lower to US$2.01 per gallon.