March 18, 2010

 

CBOT Corn Review on Wednesday: Up on Speculative buying, technical support

 

 

Speculative buying, a weaker dollar and technical support pushed Chicago Board of Trade corn futures higher Wednesday.

 

May corn ended up 7 1/4 cents to US$3.74 per bushel and July corn closed up 7 1/2 cents to US$3.85 1/4.

 

A weaker dollar set the tonnee for commodities generally, as wheat and soy also posted solid gains. Corn traded higher for most of the day and ended near session highs. May corn climbed for the second-straight day following losses the previous eight days.

 

The market's solid support at US$3.59 in the May contract has prompted some buyers to re-enter the market "to see what the upside is" said Dave Marshall, independent advisor and broker in southern Illinois.

 

"I think we've seen some additional speculative interest come into this market the past couple of days," he said.

 

While there is little fundamentals news in the market, flooding in the northern Plains and excessive moisture throughout the Midwest is fueling concerns about planting delays. The flooding in the Dakotas and Iowa will delay fieldwork and stall planting.

 

Beyond that, other areas of the Midwest have very moist soils that could be vulnerable to flooding for weeks or months to come, some analysts say.

 

"This is not going to be a season that starts early," Marshall said.

 

The market surged late in the session, with technical buying accelerating the rally, a trader said. He added that seasonally the market typically climbs this time of year, headed in the March 31 planting intentions report.

 

In addition to the planting intentions report, traders are also awaiting the quarterly grain stocks report that the U.S. Department of Agriculture will release that day. That stocks report could carry more significance this year, according to some analysts, as it could offer a glimpse into the quality of the crop this year. Some say that low test weights in the 2009 crop might mean that more of it had to be used to feed livestock.

 

Funds bought an estimated 7,000 contracts Wednesday.

 

CBOT oats futures surged Wednesday. May oats ended up 7 cents to US$2.25 per bushel and July oats climbed 7 cents to US$2.33 1/2.

 

Ethanol futures were higher. April ethanol ended up US$0.046 to US$1.590 per gallon and May ethanol settled up US$0.060 to US$1.621.