March 11, 2010

 

CBOT Corn Review on Wednesday: Lower on bearish USDA report, wheat

 

 

A bearish government report and additional pressure from wheat futures sent Chicago Board of Trade corn lower Wednesday.

 

March corn ended down 3 1/4 cents to US$3.55 1/2 per bushel, and May corn closed down 3 1/2 cents to US$3.65 1/2.

 

The market was lower throughout the session following the U.S. Department of Agriculture report, which cut export demand while reducing the 2009 crop size only slightly, less than many were expecting. The result was an increase to projected ending stocks for the 2009-10 year, adding pressure to a market that was already seen by many as fundamentally bearish.

 

"We've all been thinking demand has been running low on these exports, and the USDA got fairly aggressive with it," said Jason Britt, president of Central State Commodities.

 

The report was also bearish for wheat, which dragged on corn. However, soy were higher, which "stabilized" the other markets, a trader said. Traders said there was some selling of corn and buying of soy during the session.

 

Britt and some other analysts say that the market could get underlying support from planting concerns. Very moist Midwest soils, along with forecasts for more rain, are fueling expectations that some farmers might be switching their planting intentions to soy from corn. Corn is planted first and requires more fieldwork than soy, traders say.

 

But other traders say rains and flooding in the forecast could be helpful for farmers in the long run, as soil moisture will be ample for the growing season. They say that if there are going to be floods, it is better to have them now rather than in April or May.

 

Technically, the market is in a bearish downtrend, analysts say. But a trader said that market breaks continue to be met by short-covering, which is limiting the declines.

 

CBOT oats ended lower. March oats declined 5 cents to US$2.13 per bushel, and May oats closed down 7 cents to US$2.18. Wednesday's USDA supply and demand report left U.S. ending stocks unchanged but lowered the projected season-average farm price.

 

Ethanol futures were mostly flat. April ethanol closed flat at US$1.615 per gallon, and May ethanol settled down US$0.003 to US$1.628.