March 24, 2009

 

CBOT Corn Review on Monday: Dips; farmer selling, lack of follow-up

 

 

Chicago Board of Trade corn futures slipped Monday, ending lower as an early rally fizzled due to lack of follow-through buying, traders said.

 

May corn ended down 1 cent to US$3.95 1/2 per bushel, and July corn ended down 1 cent to US$4.06.

 

Traders said after an early rally, volume dried up and eventually farmer selling, which has capped the market's gains during the past week, pushed the market lower. May corn peaked at US$4.03 and traded higher until the last 15 minutes of the session.

 

The nearby month has closed between US$3.88 1/4 and US$3.96 1/2 for seven straight days. It has not closed above US$4 since Jan. 9.

 

Soaring U.S. stocks supported the market Monday, as did soybeans most of the day before slipping late. A trader noted some profit-taking, which he said will continue to be a factor, as there is still plenty of concern about the world economy and weak demand.

 

"If we get a big pop, people are going to want to take the money," a trader said. "It's too dangerous out there."

 

Marty Foreman, analyst for Doane Advisory Services, said farmers who want to unload more grain before planting season gets under way have a "narrowing window" and will likely continue to sell during the next two or three weeks.

 

Foreman said another factor in the market is talk that wet weather expected during the next couple of weeks could delay early planting in the U.S. corn belt. Memories of last year's historic flooding in the corn belt still linger, Foreman and others said.

 

Still, Foreman said "it's way too early to raise too many alarm bells."

 

Planted acreage is another factor helping to keep prices firm, analysts said. With many private estimates calling for corn planted acreage well below last year's total of 86 million acres, the market has to keep pace with any gains in soybeans, analysts said. The soy market is supported this week by a farmers' strike in Argentina.

 

In export news, the U.S. Department of Agriculture on Monday announced private export sales of 110,000 metric tonnes of corn for delivery to South Korea in the 2008-09 marketing year.

 

CBOT oats futures ended slightly lower. May oats closed down 1/2 cent to US$1.99 1/2 per bushel and July oats ended down 1/2 cent to US$2.08 1/4.

 

Ethanol futures were slightly higher. May ethanol ended up US$0.025 to US$1.622 per gallon and June ethanol ended up US$0.015 to US$1.638.