March 4, 2010

 

CBOT Corn Review on Wednesday: Ends up on planting concerns, weak dollar

 

 

A weaker dollar and underlying concerns about the upcoming planting season pushed Chicago Board of Trade corn futures higher Wednesday.

 

March corn ended up 5 1/4 cents to US$3.75 3/4 per bushel, and May corn closed up 5 1/4 cents to US$3.86 3/4.

 

A weaker dollar, attributed in part to an improved outlook for Greece and the euro, set the tonnee for commodities, analysts said. Corn also had a boost from stronger crude oil prices.

 

The market is maintaining some risk premium due to the heavy snowpack and the potential for early planting to be delayed this spring.

 

Traders are watching weather forecasts, which call for warming temperatures and possibly rain next week. There are differing views on the weather, as some see the warmer weather as bearish but the potential for rain as supportive.

 

Others say the quicker the snow is melted, the sooner fields can begin drying out.

 

Jason Britt, president of Central State Commodities, added that farmers were unable to complete much fieldwork last fall, and need to get some work done before they plant corn. Analysts say there is the potential for some farmers to switch acres from corn to soy if it appears the planting season is going to be late and soggy. That would be supportive to prices, but the market won't have an indication of that until the March planting intentions report at the end of the month.

 

The market faces technical resistance, as major moving averages are just above the market, Britt and others say.

 

Analysts also add that farmers still have a lot of grain they will be looking to unload on rallies.

 

"I think we're going hard-pressed to really, really run this thing higher," Britt says.

 

In the near term, the market is looking ahead to the U.S. Department of Agriculture's supply and demand report, which will be released March 10.

 

CBOT oats futures ended slightly higher. March oats ended up 1/4 cent to US$2.21 3/4 per bushel and May oats closed up 1/4 cent to US$2.30 1/4.

 

Ethanol futures were lower. March ethanol closed down US$0.019 to US$1.661 per gallon and April ethanol settled down US$0.026 to US$1.661.