March 17, 2009

 

CBOT Corn Review on Monday: Higher on US stocks; above 100-day average

 

 

Chicago Board of Trade corn futures climbed Monday, with the nearby May and new-crop December contracts both closing above the 100-day moving average for the first time since July.

 

May corn ended up 3 cents to US$3.91 1/2 per bushel and July corn ended up 3 1/2 cents to US$4.01 3/4.

 

A fifth straight day of gains in equities -- at least during corn-trading hours -- set the direction for corn and other commodities, analysts said. Given that corn also had support from climbing crude oil, it was surprising corn didn't climb further, said Jerry Gidel, analyst for North America Risk Management Services. One reason corn didn't have the strong rallies that wheat and soybeans posted Monday was that corn has recently gained on both markets, Gidel said.

 

"Corn had such a big push last week, I think there was a catch-up mentality a little bit" with wheat and soybeans, he said.

 

The market is shifting and has technical strength, having climbed above key moving averages in recent days. Farmer selling was another factor limiting gains, traders and analysts said.

 

"We're starting to buy some cash grain in the country," a trader said. "There's some pretty good movement."

 

The trader said that could limit corn's upside movement and add to the resistance around US$4 for the May contract.

 

Analysts add that the market's focus is turning to planting season and the competition for acres. Concern about a drop in corn acreage continued to support the market Monday, Gidel said.

 

Weekly export inspections reported Monday were lower than expected, at 29.039 million bushels, down from 43.812 the prior week. Analysts had expected between 35 million and 42 million bushels.

 

Funds bought an estimated 8,000 contracts Monday.

 

CBOT oats futures ended slightly higher. May oats ended up 2 1/2 cents to US$1.88 1/2 per bushel and July oats settled up 2 1/2 cents to US$1.97 1/2.

 

Ethanol futures were higher. May ethanol ended up US$0.010 to US$1.590 per gallon and June ethanol climbed US$0.021 to US$1.624.