March 20, 2010

 

CBOT Corn Review on Friday: Lower on dollar, but gains for the week

 

 

Chicago Board of Trade corn ended lower Friday on a stronger dollar, but still posted gains for the week.

 

May corn ended down 1 1/2 cents to US$3.74 1/2 a bushel, and July corn closed down 1 1/2 cents to US$3.85 1/2.

 

The market gave back some of its recent gains as it ran into technical resistance, with key moving averages hanging over the market. The dollar was the main factor in the weakness, traders said.

 

"If the dollar wasn't going to the moon, we could have a heck of a rally going," said Jerry Gidel, analyst with North America Risk Management Services.

 

Still, the May contract gained 10 1/4 cents on the week.

 

The market has underlying support due to "trepidation" about planted acreage and saturated Midwest soils that could slow early planting, said Joel Karlin, analyst for Western Milling. Midwest soils are unusually moist, with many areas expected to see more rain or snow this weekend.

 

"New crop considerations are starting to dominate," he said.

 

Informa Economics' corn acreage projection for 2010 was somewhat friendly; the private analytical firm on Friday increased its estimates for 2010 U.S. soybean and winter wheat acres and trimmed its forecast for corn plantings, traders said.

 

Informa estimated corn acreage at 88.427 million, compared to its January estimate of 89.6 million, traders said. The U.S. Department of Agriculture said 86.5 million acres of corn were planted last year.

 

The trade is looking ahead to the Mar. 31 planting intentions report from the USDA. The quarterly grain stocks report, to be released on the same day, will also be significant, analysts say. The report could give a glimpse into the quality of the 2009 crop, analysts said, as low test weights have fueled worries that cattle might need to consume more of it this year to maintain their weight.

 

After a late surge of buying on Thursday, funds sold an estimated 4,000 contracts on Friday.

 

CBOT oats ended slightly lower. May oats closed down 1 cent to US$2.24 1/2 per bushel and July oats settled down 1 cent to US$2.33.

 

Ethanol futures were lower. April ethanol was down US$0.013 to US$1.565 per gallon and May ethanol closed down US$0.020 to US$1.591.