Corn futures at the Chicago Board of Trade closed higher on Thursday on fund buying and weather jitters before the release early Friday of USDA's March planting intentions report, traders said. Strong gains in crude oil may have given corn bulls some extra fodder since the corn market and ethanol have become closely tied to moves in the energy sector.
CBOT corn closed up 6 cents per bushel to down 1/2 cent, with May up 6 at $3.94-1/2 per bushel. New-crop December was up 2-3/4 at $4.03-1/2. Volume was moderate, estimated by the CBOT at 216,013 corn futures and 89,925 options. "I think the selling was exhausted and shorts covered before the report in case of a surprise," said Shawn McCambridge, analyst for Prudential Financial.
"Both corn and wheat were technically oversold and they moved up in tandem," he said. The USDA March plantings report, billed by some as the report of the century and the most important USDA report in history, will be released at 8:30 am EDT (1230 GMT) on Friday. Analysts pegged 2007 US corn seedings at 88.0 million, a 60-year high and up from last year's 78.3 million acres.
Export news was supportive for corn futures with USDA on Thursday reporting 1,156,000 tonnes of corn sold for export last week, above estimates for 650,000 to 800,000 tonnes. There has been speculation that exports of US corn may slow because prices continue to fluctuate around 10-year highs but so far there has been no indication that corn exports are slowing.
Corn used for feed in the United States also may begin to dwindle because of the high price. An average of analysts' estimates pegged the US supply of corn on March 1 at 5.994 billion bushels, below the tally of 6.987 billion a year ago. USDA on Friday also will release its quarterly stocks report in concert with the widely anticipated plantings report.
Wet weather in the Midwest is recharging soil moisture reserves and there is some concern about outlooks for cooler and damp weather next week that may slow early spring seedings. "Weather will still be the most important factor over the next several months and the 15-day forecast, which isn't always very reliable, shows that for the next 10 to 12 days there won't be very good planting weather," McCambridge said.
Technical traders are watching the May contract face resistance at its 100-day moving average of $3.98-1/4 per bushel. The nine-day relative strength index closed on Thursday at 39. Oat futures were up 1-1/2 to 3-3/4 cents per bushel, with May up 3-3/4 at $2.92 per bushel. Oats volume was estimated at 1,582 futures and 168 options.
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