April 17, 2009

 

CBOT Corn Review on Thursday: Ends up on outside surge; demand weighs

 

 

Chicago Board of Trade corn futures ended higher, surging late on support from neighboring markets.

 

May corn ended up 1 1/4 cents to US$3.85 3/4 per bushel and July corn ended up 1 1/4 cents to US$3.95 1/4.

 

Prices were lower most of the day but climbed late in the session. A surge in soyoil and support from wheat pushed corn higher, said Mike Zuzolo, senior analyst for Risk Management Commodities.

 

The market has little of its own strength, analysts said.

 

"I've felt like all week this week that corn was shrugging off potential planting delays because, 'A', it looked like a warm-up was coming next week and 'B', because the ethanol demand was up in the air," Zuzolo said.

 

Although weekly export sales were strong at above one million metric tonnes, corn demand is struggling in other areas, traders and analysts said.

 

The purchase of approximately 160,000 metric tonnes of feed wheat from Denmark shows that there's still plenty of feed wheat, and that prices are competitive to corn, a trader said.

 

"That's what broke corn yesterday," he said, adding it was still pressuring the market.

 

Analysts added that there is concern about a California decision expected next week on a new low-carbon emissions standard. The new standard could sharply curtail ethanol use, although some analysts said that even if it is approved, it won't have an immediate effect on ethanol demand.

 

A trader said that volume is light, because "people got whacked buying the break the past two days." He said a dip below US$3.80 in the nearby contract would trigger more sell stops. Corn is seen range-bound, underpinned by soybeans but unable to break above US$4.

 

The trade currently has a "wait-and-see" attitude for corn, Zuzolo said.

 

"It just seems like to corn trade is waiting for more information before deciding which way to go," Zuzolo said.

 

Weather is seen mostly as bearish. A floor analyst said farmers will "go great guns" next week when warm, dry weather returns.

 

CBOT oats futures ended lower. May oats settled up 3 1/2 cents to US$1.86 1/2 per bushel and July oats ended up 3 1/4 cents to US$1.95 3/4.

 

Ethanol futures were higher. May ethanol ended up US$0.016 to US$1.573 per gallon and June ethanol ended up US$0.015 to US$1.588.