CBOT Corn Review: Higher; Surges Late On Fund-Buying
11/02/2009 03:00PM
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CHICAGO (Dow Jones)--Chicago Board of Trade corn futures ended higher Monday, surging late on a wave of fund-buying.
December corn ended up 16 1/4 cents to $3.82 1/4 per bushel, and March corn ended up 16 1/2 cents to $3.95 3/4.
The market was only modestly higher all day until the late jump, which traders said did not seem to have any spark from fundamental news or outside markets.
"To me, it looked like first-of-the-month, index-fund buying," said Arlan Suderman, an analyst for Farm Futures.
Funds bought an estimated 11,000 contracts. ADM Investor Services was noted as a late buyer of 4,000 December contracts and 2,000 March contracts in the trading pit.
A weaker dollar and stronger equities underpinned the market early in the day, but were not seen as a factor at the close.
Overhanging the market is a drier weather pattern settling into the Midwest that could provide the most extended harvest window of the season. That could put increased pressure on the market as the week progresses, traders said.
"But here in the short term, I suspect farmers are going to take the soybeans out first, so we're really not seeing all that much corn activity," said Shawn McCambridge, senior grains analyst for Prudential Bache.
He added that the market was short-term oversold.
Suderman was reluctant to put too much emphasis on the day's gains, as they came mostly from outside influences rather than fundamental strength.
"That type of support, it's tough to sustain, but it does help turn chart signals, it does help change sentiment," he said.
The market's late surge came amid similar gains in soybeans and wheat, although the fund-buying appeared to be strongest in corn.
Traders are looking ahead to next week's supply and demand report, but more immediately to Monday afternoon's crop progress report. Analysts expect harvest progress to be at 25% or slightly lower, up from 20% the previous week but well below the average.
CBOT oats futures ended mostly flat Monday. December oats were down 1/4 cent to $2.54 1/4 per bushel and March oats settled flat at $2.68.
Ethanol futures were mostly higher. November ethanol was up $0.020 to $1.955 per gallon and December ethanol closed down $0.001 to $1.845.
-By Ian Berry, Dow Jones Newswires; 312-341-5778; ian.berry@dowjones.com