March 21, 2009

 

CBOT Corn Review on Friday: Ends flat; pause to rally, US$4 resistance

 

 

CBOT corn futures closed mostly unchanged, with the directionless market caught between lower wheat and higher soybeans.

 

May corn ended flat at US$3.96 1/2 per bushel, July corn ended flat at US$4.07 and Dec corn ended down 1/4 cent at US$4.28.

 

The May contract gained 8 cents on the week following last week's climb of 27 cents. But corn and other grains took "a breather" Friday following Thursday's climb on a weaker dollar, said Tom Leffler, owner of Leffler Commodities.

 

"The markets were just having a knee-jerk reaction to that news [Thursday]," Leffler said. "Not to say the news can't be good for it down the road.

 

The US$4 mark in May corn proved to be tough resistance all week, psychologically and because it triggered farmer selling, analysts said.

 

"I don't know if corn has the get-up-and-go to keep going, but technically it looks good. The story behind it looks bad," said Jim Riley, analyst for Linn Group. "I don't know where your demand is going to come from."

 

A trader said he thinks farmer selling at US$4 is starting to diminish, however, and that it could take a run to US$4.15 to US$4.25 to prompt more grain movement. Producers are eager to sell grain ahead of planting season to avoid any quality damage and for cash-flow reasons, analysts say.

 

The trade is looking ahead to the March 31 planting intentions report, and some traders are saying that wet weather forecasts for the U.S. corn belt could mean delays to early planting. Others say such talk is premature.

 

"People want to talk about 30-day forecasts but it's kind of a crapshoot at that point," Riley said.

 

Traders and analysts say that the market's activity will continue to be dictated in the short term by movement in the dollar, but that eventually the planting season will take on greater importance.

 

CBOT oats futures were slightly lower. May oats ended down 1 cent at US$2.00 per bushel and July oats ended down 1 cent at US$2.08 3/4.

 

Ethanol futures were lower. May ethanol was down US$0.006 at US$1.597 per gallon and June ethanol was down US$0.013 at US$1.623.