CHICAGO (Dow Jones)--Chicago Board of Trade corn futures ended higher Tuesday, rallying on technically inspired buying and long range bullish demand prospects, analysts said.
March corn ended 6 1/4 cents higher at $4.11 per bushel, and December finished 4 1/2 cents higher at $4.03.
The nearby March future climbed near a one-month high, fueled by technical momentum and spillover support from outside markets, analysts said. The new crop December future rallied to a new contract high amid the need for the market to produce prices that will secure adequate acreage in 2007, analysts added.
The supportive theme was consistent from the outset, with the absence of aggressive selling pressure and the ability of futures to breach resistance at previous highs uncovering pre-placed buy orders to lift prices higher, traders said.
Expectations of bullish long range projections when the U.S. Department of Agriculture releases its 10-year baseline projections Wednesday helped provide light support as well, a CBOT floor analyst said. The baseline projections are not anything concrete to hang you hat on, but they will give a glimpse at what the USDA is looking at in regards to long term ethanol demand, he added.
Nevertheless, technical activity was the dominant feature of the day in a light volume rally, with a jump in crude oil and metals prices aiding the higher theme.
Meanwhile, the DTN Meteorlogix Weather forecast said winter storm conditions are bearing down on transportation systems across the Midwest, and the largest affected area encompasses Illinois, Indiana, and Ohio. The forecast calls for snowfall of from three to six inches in this corridor of the eastern Midwest into Wednesday. Transportation delays will be extensive, and the already-snarled barge traffic pattern on the Illinois River will have further delays. Farther west and north, snow and cold conditions will hinder livestock transportation in the remainder of the Midwest during this midweek time frame.
In South America, Argentina's central crop belt has mostly dry weather in store until late this week. Friday through Sunday will see a strong chance of widespread thunderstorms, producing more than one inch of rain. This oncoming round of rainfall will further benefit corn in the filling stage, Meteorlogix reports.
In pit trades, Tenco and Fimat each bought 400 March, Goldenberg Hehmeyer bought 500 March, RJ O'Brien bought 400 December, Calyon Financial and Rand Financial each bought 300 March, with Rosenthal buying 300 December. Speculative fund buying in estimated at 4,000 contracts.
JP Morgan sold 900 July and 400 December, Tenco sold 500 March, Fimat sold 1,000 March, and Rand Financial sold 400 May.
Day session volume on the e-CBOT platform was 136,202 contracts.
CBOT oat futures ended lower, with old/new crop spreading remaining a feature. Traders said commission house or fund liquidation continued to plague the nearby March future, while the new crop December contract received support from speculative buying. March oats closed 3 1/4 cents lower at $2.42 per bushel and December ended 1 1/4-cent lower at $2.51 3/4.
Ethanol futures ended higher, with the March contract settling 0.020 higher at $2.045, and the April contract settling 0.010 higher at $2.000.
