January 1, 2009

 

CBOT Corn Review on Wednesday: Year-end strength caps mixed trade

 

 

Chicago Board of Trade corn futures broke away from mixed-to-lower trade Wednesday to finish the final day of trading in 2008 with double-digit gains.

 

March corn gained 10 3/4 cents to settle at US$4.07 a bushel. May corn added 11 1/4 cents a bushel to close at US$4.17 3/4 and July corn rose 11 cents to US$4.28.

 

Newedge bought 3,000 March corn on the close, a CBOT floor trader said. Speculative funds purchased an estimated 4,000 CBOT corn contracts, according to post-close estimates.

 

A bit of short-covering was attracted in thin trading after consolidative positioning accompanied the week's earlier downward correction, said John Kleist an analyst/broker at Allendale.

 

Corn was helped by soybeans and wheat and "will continue to look for leadership elsewhere," he said.

 

The every-five-year grain stocks review released by the U.S. Department of Agriculture Wednesday showed no change for ending stocks of corn, wheat or soybeans.

 

"The outlook for corn inventories during the current 2008-2009 crop year suggests neither supply constraint nor significant further near-term bullishness," said JP Morgan analyst Lewis Hagedorn in his monthly commodities review released Wednesday.

 

"That the market took little heed of bearish USDA statistical revisions, and has continued the rally begun in early December, suggests that focus may now be turning to the coming crop year," Hagedorn said. "The volatility of new-crop corn/soybean price relationships relatively far in advance of plantings suggests deferred corn futures will need to continue to bid actively for 2009 acreage."

 

Traders say South American weather issues are generally priced into the market, but they continue to look for any major changes in the forecast.

 

"Rains appear likely to remain limited for most of the driest sections of Argentina, allowing at least a third of the corn/soybean belt to encounter ongoing moisture stress," according to Cropcast Agricultural Weather's Wednesday forecast.

 

"Some relief could reach into Buenos Aires during the 6-to-10 day period, but rains are still not expected to be generalized enough to bring widespread reductions in moisture stress," Cropcast said.

 

In other markets, CBOT March oat futures closed flat at US$2.10 a bushel.

 

Ethanol futures closed up US$0.009 cents to US$1.620 a gallon in the nearby January contract. March ethanol gained US$0.030 cent to US$1.649.