March 31, 2009

 

CBOT Corn Review on Monday: Dips slightly on equities, crude oil

 

 

Chicago Board of Trade corn futures ended slightly lower Monday, as caution ahead of Tuesday's key USDA reports limited losses, traders said.

 

May corn ended down 3/4 cent to US$3.86 1/4 per bushel, July corn ended down 3/4 cent to US$3.96 3/4, and December corn ended down 1 cent to US$4.18 1/4.

 

Concerns about the global economy re-emerged Monday, with concerns about the U.S. auto industry helping send equities sharply lower. Weaker crude oil and a stronger dollar also weighed on corn throughout the day.

 

"People are starting to step back from that and say 'hey, what's really changed, when the economy is still weak,'" said Joel Karlin, analyst for Western Milling.

 

Losses would have been worse if not for the planting intentions and quarterly grain stocks reports scheduled for release at 8:30 a.m. EDT Tuesday, traders said.

 

"I really thought they would pound it harder given what's going on, but it seems like they came in short-covering from the get-go," a trader said.

 

The report is expected to show acreage about 1.5 million bushels lower than last year's total of 86 million, but analysts estimates vary widely. The recent strength in corn and outside markets had some analysts speculating the market was ready to move another leg up above US$4 on the report, but the concerns about the economy are now opening up the possibility of a move in the other direction.

 

"I think a number over 84 (million acres), I think that sets us down another leg or so," Karlin said.

 

Traders have been starting to keep an eye on weather forecasts, with wet, chilly conditions in the U.S. corn belt prompting talk of delayed early planting. Some say last year's season, which included historic flooding in the corn belt, will make the market more jittery this year, while others say it will have the opposite effect since last year's crop ultimately performed well.

 

CBOT oats futures ended lower. May oats were down 2 1/2 cents to US$1.93 per bushel and July oats were down 2 cents to US$2.02.

 

Ethanol futures were lower. May ethanol ended down US$0.020 to US$1.568 per gallon and July ethanol ended down US$0.013 to US$1.600

 

.