CBOT Corn Review on Monday: Ends up on crude strength, short-covering

 

 

March corn ended up 4 1/2 cents at US$3.57 1/4 a bushel, May corn ended up 4 cents at US$3.65 1/2 and July corn ended up 4 1/4 cents at US$3.75 1/4.

 

The higher crude oil gives support specifically to corn because of both markets' ties to the ethanol industry, which has suffered mightily in recent months. About one-third of the U.S. corn crop goes to ethanol. Crude oil climbed more than US$1.50 Monday, climbing above US$47.

 

The rising crude oil and gasoline prices help improve ethanol margins.

 

"It does give an opportunity for the ethanol market to get revived here a little bit," said Jerry Gidel, an analyst for North America Risk Management Services.

 

A trader said that the benefits to ethanol are limited, however, because of strong cash prices for corn. Strong prices in South America have supported the corn market, traders said.

 

Lower wheat futures were seen limiting gains. The market climbed as much as 8 cents during the session but trimmed gains late.

 

Although U.S. equities were far from bullish Monday, the lack of a steep drop helped corn rally, traders said.

 

"If the stock market can just go sideways, the commodity world is trying to build a base, and get shorts to cover their positions," a trader said.

 

Adding support Monday were weekly corn export inspections, which were reported at 40.566 million bushels, well above trade estimates of 25 to 31 million bushels.

 

Analysts said trading activity will remain subdued heading into Wednesday's supply-and-demand report. The trade is expecting a modest increase in ending stocks as demand continues to lag.

 

Some traders say the market's focus will soon turn to the supply in the U.S. rather than demand. For now demand remains a bearish factor due to the weak world economy, they say.

 

Oats futures ended higher. May oats ended up 1 1/2 cents at US$1.84 1/4 a bushel and July oats ended up 1 1/2 cents at US$1.93 1/4.

 

Ethanol futures were higher. May ethanol ended up US$0.019 at US$1.527 a gallon and June ethanol ended up US$0.015 at US$1.543.