March 28, 2008

 

CBOT Corn Review on Thursday: Hold firm as fundamentals underpin

 

 

Chicago Board of Trade corn futures ended higher Thursday, buoyed by supportive fundamental outlooks heading toward Monday's plantings and stocks reports, analysts said.

 

May corn settled 3 1/4 cents higher at US$5.55 1/2, July corn ended 2 1/4 cents higher at US$5.67 1/4, and December finished unchanged at US$5.68 1/2.

 

Corn futures have shifted their focus back to fundamentals, with outlooks for smaller 2008 U.S. corn acres, strong demand and lingering worries that the prospects for early plantings in the southern Midwest is diminishing amid wet, cool conditions across the central U.S. underpinning prices, analysts added.

 

Trade positioning ahead of Monday's prospective planting and quarterly grain stocks report did produce a choppy tonnee for most of the day, but bullish fundamental outlooks and respectable weekly export sales managed to overshadow spillover weakness from soybeans and a firmer U.S. dollar, traders said.

 

Otherwise, activity was light with traders taking a cautious approach unwilling to take on added risk with uncertainties of 2008 production, seedings and weather keeping some participants on the sidelines ahead of Monday's reports, traders added.

 

Meanwhile, the DTN Meteorlogix forecast for the Midwest region calls for moderate to locally heavy snow from the northern Midwest into the Great Lakes. Showers and thunderstorms will develop in the southern half of the Midwest through the Ohio Valley. The winter moisture will cause transportation delays, but will bring some needed soil moisture to the upper Midwest. Southern Midwest areas, however, will face continued fieldwork delays and renewed flooding concerns because of this persistent wet weather pattern.

 

Higher margins on CBOT corn took effect Thursday. Corn initial margins were raised to US$2,025, up from US$1,350 a contract.

 

The U.S. Department of Agriculture is slated to issue its prospective plantings estimates Monday. The average of analysts' estimates from a survey by Dow Jones Newswires project U.S. corn plantings to drop by 6.2 million acres to 87.387 million, down from 93.600 million seeded in 2007. In pit trades, buyers and sellers were scattered among various commission houses, with speculative fund buying estimated at 1,000 lots.

 

Oat futures ended mixed as traders took a step back ahead of the release of USDA prospective plantings estimates on Monday, a floor trader said. The market was "resting for the report," he said. May oats rose 1/2 cent to US$3.44 3/4.

 

Ethanol futures finished stronger. April ethanol ended up 0.4 cent at US$2.497 per gallon, while May ethanol jumped 0.7 cent to US$2.452.