March 9, 2010

 

CBOT Corn Review on Monday: Down slightly; traders waiting for USDA

 

 

Chicago Board of Trade ended down less than a penny in choppy trade as traders await Wednesday's supply and demand report and 2009 crop revisions.

 

The market traded both sides of unchanged throughout the session and is merely "marking time" until Wednesday morning's U.S. Department of Agriculture report, said Arlan Suderman, analyst for Farm Futures.

 

March corn ended down 1/4 cent to US$3.64 1/2 per bushel, and May corn settled down 1/2 cent to US$3.75. Deferred contracts, including December corn, ended up slightly.

 

Many are expecting a cut to the 2009 crop but a corresponding decrease in demand when the USDA releases new supply and demand estimates Wednesday. The report will be released at 8:30 a.m. EST. Suderman said corn mostly moved inversely to the dollar throughout the session.

 

Views of the warmer, wet weather in the Midwest are mixed. Warmer temperatures and some rainfall are melting some of the huge snowpack in the Midwest, particularly in the northern plains. Suderman and others say the melting snow gives a reason to remove some risk premium from the market.

 

"If you're going to flood you'd rather do it in March than in April," Suderman said.

 

While traders are mostly expecting little change to the balance sheet in the report, the USDA's March crop revision is unusual, and the uncertainty is underpinning the market, analysts say.

 

Some remain concerned about delays to spring planting in the U.S. because of excessively wet soils, and South American rains that are slowing harvest of the crop there are also underpinning prices.

 

Technically the market is under pressure after a bearish close last week. Suderman said a dip below US$3.70 in the May contract could trigger more technical selling, although he considered that unlikely before the USDA report.

 

CBOT oats ended higher. March oats ended up 1 1/2 cents to US$2.20 1/2 per bushel and May oats ended up 1 cent to US$2.27 1/2.

 

Ethanol futures were higher. April ethanol closed up US$0.019 to US$1.634 per gallon and May ethanol settled up US$0.022 to US$1.651.