February 4, 2006

 

CBOT Corn Review on Friday: Higher on funds, technicals

 

 

Corn futures at the Chicago Board of Trade ended moderately higher Friday, boosted by strong fund and technical buying, sources said. Most-active March finished at its highest level since early September.

 

March corn gained 4 3/4 cents to US$2.25 3/4 per bushel, May also rose 4 3/4 cents to US$2.35, and July finished 4 3/4 cents higher at US$2.44.

 

"Strong fund buying led the market into technical buy stops and helped push the market higher," said Vic Lespinasse of AG Edwards & Sons.

 

The weather in Argentina was not bullish, but nobody was interested in the fundamentals on Friday, he added. Local traders followed the funds as well, he added.

 

Commodity fund buying was estimated at 13,000 contracts, with several traders speculating that index fund buying made up a good portion of that total.

 

"Once corn got above the US$2.20 level in March, the regular commodity trading funds stepped in to buy and there was nobody to take the other side," a floor analyst said.

 

Spillover support from wheat and soybeans added to the gains, with March wheat reaching levels not seen since mid-October. Fund buying also propelled soybean futures higher after mid-session, despite rain in Argentina overnight.

 

March wheat jumped 9 1/4 cents to US$3.56 1/2, with March soybeans gaining 10 3/4 cents to US$5.94 3/4.

 

On technical charts, March corn moved above resistance at US$2.25 and traded at its highest levels since Sep. 9. In addition, it partially filled a downside gap created on daily price charts between Sept. 9 and Sept. 12.

 

For the week, March corn gained 6 1/2 cents from last Friday's settlement.

 

Buyers on Friday included ADM, which bought 500 March, ABN Amro bought 1,700 March, Calyon Financial bought 600 March and 500 May, JP Morgan bought 1,000 March, Citigroup bought 1,300 July, Fimat bought 1,500 March and 2,000 July, Man Financial bought 1,000 March, O'Connor bought 1,000 July and Fortis bought 1,500 March.

 

Sellers Friday included ADM, which sold 700 March, ABN Amro sold 700 March, the Refco division of Man Financial sold 600 March and Tenco sold 400 March.

 

Oat futures settled moderately higher as fund buying and spillover from the rest of the floor provided support, an oats trader said. March oats settled 6 cents higher to US$2.02, its highest settlement price since Jan. 4.

 

Ethanol futures ended slightly higher. The most-active March contract did not trade and finished up 1 cent at US$2.53 per gallon.

 

After the close on Friday, the Commodity Futures Trading Commission is scheduled to release the latest commitment of traders report for the week ended Jan. 31.

 

On Monday, the U.S. Department of Agriculture is scheduled to release the weekly export inspections report at 10 a.m. CST.