March 27, 2009

 

CBOT Corn Review on Thursday: Climbs on exports, outside markets

 

 

Chicago Board of Trade corn futures ended higher on support from strong export sales, crude oil and equities, analysts said.

 

May corn ended up 5 cents to US$3.90 3/4 per bushel, July corn ended up 5 cents to US$4.01 1/4, and December corn ended up 5 1/4 cents to US$4.22 3/4.

 

Strong weekly export sales of more than 1 million metric tonnes supported a market that has been range-bound this week in consolidative trade.

 

"I think it was a reminder to both specs and end-users that dips are to be bought," says Arlan Suderman, analyst for Farm Futures. "But I don't really expect it to have any sustained legs on it until we see next Tuesday's numbers."

 

The U.S. Department of Agriculture will release planting intentions and quarterly grains stocks reports Tuesday at 8:30 a.m. EDT. The trade is expecting on average that the USDA will peg planted acres at 84.548 million acres, down from 86 million last year, as farmers switch to soybeans. Traders and analysts say the market is unlikely to make any sharp moves before Tuesday's report. A trader said losses in the market this week were overdone, which helped cause Thursday's bounce.

 

"A lot of technical traders looking at it saw that it was oversold in the short-run, but the big picture is still bearish," the trader said.

 

Others think the market is poised to surge above US$4 if Tuesday's reports are supportive. Suderman said the market could test resistance at US$4.28.

 

"We are seeing signs that new money is willing to come back," Suderman said.

 

Outside markets were supportive Thursday, with gains in crude oil and equities helping send sellers to the sidelines, Suderman said. A trader added that there was trading of the corn-soy spread. Nearby soybean contracts ended several cents lower.

 

Traders and analysts say there is concern about wet U.S. corn belt weather delaying planting and fieldwork, although most dismiss those concerns as premature until the planting intentions report is released.

 

"It's pretty early for that to be a significant market factor," Suderman said. "I know it gets a lot of chatter but I think it's early for that."

 

CBOT oats futures ended higher. May oats settled up 3 1/2 cents to US$1.97 per bushel and July oats ended up 3 1/4 cents to US$2.05 1/2.

 

Ethanol futures ended higher. May ethanol closed up US$0.015 to US$1.606 per gallon and June ethanol settled up US$0.014 to US$1.619.