March 25, 2009

 

CBOT Corn Review on Tuesday: Ends slightly lower; pressure from wheat

 

 

Chicago Board of Trade corn futures ended lower Tuesday, drifting in consolidative trade amid pressure from wheat, traders said.

 

May corn ended down 1 3/4 cents to US$3.93 3/4 per bushel, July corn ended down 1 3/4 cents to US$4.04 1/4 and December corn ended down 2 cents to US$4.25 1/4.

 

The market was caught between higher soybeans, which have been supported by the farmers strike in Argentina, and losses of 14 cents in wheat.

 

"With wheat breaking because of the wet weather in the western Plains, it's going to be tough for corn to hold its own," said Chad Henderson, analyst with PrimeAg Consultants.

 

He expects the market to move sideways-to-lower as traders consolidate between now and the March 31 planting intentions report. That report could signal "a stark turn in the long-term fundamental landscape," JP Morgan said in a monthly price outlook released Tuesday.

 

The trade is expecting the U.S. Department of Agriculture will project planted acreage below last year's total of 86 million acres, with some estimates as much as 5 million acres lower. Concerns about less planted acreage have helped underpin the market, analysts said.

 

Some analysts and traders say that wet weather in the U.S. corn belt could hinder early planting. Producers hoping to plant corn are already behind schedule because they were unable to perform much fieldwork last fall, some analysts said.

 

Other traders and analysts say it is still too soon to worry about planting delays.

 

The market has resistance at US$4 in the May contract, but it remains on an uptrend, analysts said.

 

"The fundamentals in corn are still questionable but the technicals look very good, which could help push this market higher or at least keep the market from breaking down, assuming we don't get a big acreage shock next week," Linn Group analyst Jim Riley said in a market commentary.

 

Other than soy and wheat, outside markets provided little direction Tuesday, analysts said. Equities were slightly lower much of the day and crude oil ended flat.

 

CBOT oats futures ended lower. May oats ended down 2 cents to US$1.97 1/2 per bushel and July oats ended down 2 cents to US$2.06 1/4.

 

Ethanol futures were slightly lower. May ethanol settled down US$0.004 to US$1.618 per gallon and June ethanol ended down US$0.003 to US$1.635.