March 31, 2010

 

CBOT Corn Review on Tuesday: Lower on weather, technical pressure

 

 

Chicago Board of Trade corn ended lower Tuesday as the market slid late in the session on technical pressure, favorable weather and spread-trading.

 

May corn ended down 2 1/2 cents at US$3.54 1/2 a bushel, and July corn closed down 2 1/4 cents at US$3.66.

 

After trading sideways most of the session, prices fell late in the day as the dollar firmed and the May contract hit a new 2010 low at US$3.52. The dip to a new low attracted more selling, traders said.

 

Prices remain above the 2010 low for front-month corn, however, which occurred in early February when the March contract hit US$3.47 3/4.

 

Significantly warmer weather this week, with forecasts calling for typical spring weather beyond that, is eroding the argument for keeping risk premium in the market, some traders say.

 

Areas of the northwestern Midwest, most vulnerable to planting delays because of excessive soil moisture, are due for rain in the extended forecast, but Farm Futures noted that the 16-to-30-day forecast remains drier than normal.

 

"This should limit interruptions to fieldwork and most areas could still get off to a fairly good start to planting if rains do indeed diminish during the latter half of April," Farm Futures analyst Arlan Suderman said.

 

Traders added that there was positioning ahead of Wednesday's key acreage report from the U.S. Department of Agriculture, and spread-trading. Corn's decline on the day came as wheat and soy climbed.

 

Funds sold an estimated 6,000 contracts during the session.

 

The USDA will release acreage and quarterly stock estimates Wednesday at 8:30 a.m. EDT. Analysts are expecting the government to show an increase in corn acreage compared with 2009, as millions of acres normally planted to wheat are used for other crops instead.

 

CBOT oat futures were higher Tuesday. May oats climbed 1 1/2 cents to US$2.13 1/2 a bushel and July oats settled up 1 1/2 cents at US$2.22 1/2.

 

Ethanol futures were weaker. April ethanol slipped US$0.005 to US$1.567 a gallon and May ethanol fell US$0.006 to US$1.584.