February 11, 2010

 

CBOT Corn Review on Wednesday: Ends higher on wheat, crude, soy

 

 

Chicago Board of Trade corn futures ended higher Wednesday amid support from wheat, soy and crude oil, analysts said.

 

March corn ended up 3 1/4 cents to US$3.61 3/4 per bushel, and May corn ended up 3 cents to US$3.73 1/4.

 

Surging wheat prices and gains in soy helped lift the market, traders said.

 

Some traders and analysts say that Tuesday's supply and demand report was friendly, but most say there was little fundamental reason for the market to climb. A large 2009 crop, expectations of increased 2010 acreage and strong South American crops are all weighing, traders say.

 

At the same time, the market should have support just below US$3.50, they said.

 

"It's going to be tough to take out those lows we made last week," said Jim Riley, analyst for Linn Group. "You'd have to find a reason to sell, and find someone willing to sell it at those levels."

 

Riley added that gains in crude were supportive Wednesday. Funds bought an estimated 8,000 contracts.

 

Many traders and analysts say the market could go sideways for the foreseeable futures. Alexander Bos, an analyst with Macquarie Bank, said in a report that corn could go "sideways to slightly higher into the spring planting season."

 

The U.S. Department of Agriculture will release baseline production estimates for 2010 at its annual outlook forum next week, but traders said that the market could disregard that, and instead await the March planting intentions report and any potential revisions stemming from a re-survey of the 2009 crop.

 

The market's direction could be dictated by outside markets in the absence of fundamental news, traders said.

 

CBOT oats futures ended higher Wednesday. March oats ended up 2 1/4 cents to US$2.32 1/4 per bushel and May oats ended up 2 1/4 cents to US$2.40 3/4.

 

Ethanol futures were lower. March ethanol ended down US$0.013 to US$1.748 per gallon and April ethanol closed down US$0.009 to US$1.751.