Corn futures, set for the biggest annual advance in four years, may extend gains to end the year on a strong note, according to Barclays Capital. “The commodity markets in general, with perhaps the exception of natural gas, look set to see out the year on a strong note, and this is no less the case for the agricultural sector,” according to a report dated yesterday by analysts including Philip Roberts. “Corn, in particular, has been strong, and we expect the 5 1/2-month trendline support in the $5.40 area to keep any downside move in check.” Corn futures, which have rallied 42 percent this year, are set for the biggest yearly gain since 2006 as rain and drought reduced global grain crops. The Thomson Reuters/Jefferies CRB Index of 19 raw materials has advanced 13 percent this year after a 23 percent gain in 2009. “On the back of trend resumption signaled by widening Bollinger bands and the bullish” moving average convergence- divergence crossover, a close over the range highs in the $5.80 area may drive futures to resistance of $5.97 and to test the $6.17 high, the bank said. Moving average convergence-divergence is a momentum indicator, while Bollinger bands, developed by analyst John Bollinger, are based on historical price swings. The bands narrow and widen to reflect the size of those moves, and represent possible support and resistance levels. Corn for March delivery declined as much as 0.7 percent to $5.8450 a bushel on the Chicago Board of Trade today. The most- active contract surged as much as 2.6 percent yesterday to $5.89, the highest level since Nov. 10, before ending at $5.8850. In technical analysis, investors and analysts study charts of trading patterns and prices to predict changes in a security, commodity, currency or index. To contact the reporter on this story: Thomas Kutty Abraham in Mumbai at tabraham4@bloomberg.net; To contact the editors responsible for this story: James Poole at jpoole4@Bloomberg.net.

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