February 10, 2009

 

CBOT Corn Review on Monday: Inches higher; positioning ahead of USDA

 

 

Chicago Board of Trade corn futures closed slightly higher Monday, holding firm on technical support as cautious traders awaited Tuesday's supply and demand report.

 

March corn ended up 1/4 cent at US$3.77 1/2 per bushel, May corn ended up 1/2 cent at US$3.88, and July corn ended up 3/4 cent at US$3.98 1/2.

 

The trade sat on its hands while awaiting Tuesday's report from the U.S. Department of Agriculture, which will be released Tuesday at 8:30 a.m. EST. The trade expects on average 2008-09 carryout of 1.838 billion bushels, up from 1.790 billion in the January report.

 

The trade expects the report to have a "bearish bias," but after sharp cuts in projected demand in recent reports, "I don't know how much more they really need to crank it down," said Chad Henderson, analyst forn Prime Ag Consulting.

 

He said the March contract is in a range between US$3.60 and US$4. Henderson doesn't expect a significant move out of that range until mid-April, when planting intentions have become clear.

 

Prices had climbed as much as 6 cents in early trade Monday and were 2 to 3 cents higher for most of the day, before trimming and retreating back below 20-day and 50-day moving averages at the close.

 

Technically, the market could have more upside momentum this week "provided we don't have a real bearish report," a trader said.

 

The market held firm even as soybeans, which had opened higher, retreated. Higher wheat gave corn support, a trader said. Other outside markets were mixed throughout the day, analysts said.

 

South Korea's reported purchase of 100,000 metric tonnes of U.S. corn Monday morning also gave the market a boost, an analyst said, reinforcing the three consecutive weeks of strong export sales.

 

Still, analysts noted that exports still remain well behind last marketing year's pace.

 

"The export sales will help support the market, but don't think these will help rally the corn," the Linn Group said in a market commentary. "Any move higher in corn would probably cut off the export sales again, and the corn market just can't afford that right now."

 

CBOT oats futures ended slightly higher. March oats were up 1 cent at US$1.96 per bushel and May oats were up 1/2 cent at US$2.05.

 

Ethanol futures were mixed. March ethanol ended up US$0.004 to US$1.615 per gallon and May ethanol dropped US$0.003 to US$1.637.