April 18, 2008

 

CBOT Corn Review on Thursday: Flat-up slightly on weather, funds

 

 

U.S. corn futures closed steady to slightly higher after early buying turned into speculative fund selling amid a mixed trade in the key crude oil market and lower precious metals prices, taking corn off its early highs, traders and analysts said Thursday.

 

Nearby May corn on the Chicago Board of Trade closed unchanged to settle at US$6.03 1/2, July was also unchanged at US$6.17 and new-crop December added 1/4 cent to US$6.26 a bushel.

 

"The market just kind of stalled here, and I think people who had money in here last week probably took some money off the table today," said Shawn McCambridge, senior grains analyst at Prudential Bache in Chicago.

 

Prices opened higher and quickly rose to session highs, but profit-taking amid uncertain weather forecasts took prices off their tops and eventually they fell south of unchanged as early buyers turned sellers.

 

Commodity funds led the selling, shedding a net 2,000 lots during the session.

 

Despite the selling, bullish traders countered the move and lifted prices off of their lows ahead of the closing bell.

 

Traders said much of the market's bullish news has been factored into prices and traders are now trying to get a clearer picture of the long-term weather forecasts.

 

"Even though we have solid underlying support, the buying interest just isn't there right now, and we've pretty well digested everything," he said.

 

Uncertainty in the weather forecasts is keeping some traders on the sidelines, waiting for more definitive outlooks, as there is still time for farmers to get the crop planted. The longer the current cycle of cool, wet weather continues, however, the more it favors planting more soybeans and fewer acres to corn.

 

Scattered showers are currently moving across eastern Nebraska, Iowa and parts of southern Minnesota and Wisconsin, which are expected to spread into Missouri, Illinois and western Indiana by Friday, DTN Meteorlogix said. Rainfall is expected to total from 0.50-1.50 inches with locally heavier amounts possible.

 

The six- to 10-day outlook calls for near- to above-normal rainfall and near- to below-normal temperatures, which will likely keep the corn belt too soggy to plant.

 

Because it is still early in the planting season, farmers can afford to wait until the skies clear and topsoil dries out before planting. If the wet pattern continues for two or three weeks, however, producers may be forced to plant into the wet ground and hope for the best, or "mud it in," McCambridge said, which could bring about problems such as underdeveloped root systems and seed rot.

 

In export news, sales for the week to April 10 totaled 921,600 metric tonnes, the U.S. Agriculture Department reported, which were just above pre-report estimates of 600,000 to 900,000 tonnes. Sales of 868,900 tonnes were reported for 2007-08 and 53,600 tonnes were for the 2008-09 marketing year.

 

Corn shipments for the week totaled 1,112,200 tonnes, which were down 11% from the previous week and 14% below the prior four-week average. In addition to the weekly sales, the USDA also announced sales of 170,688 metric tonnes to Japan for 2007-08 and 110,400 tonnes of corn to Mexico. Of the total to Mexico, 22,080 tonnes were for 2007-08 delivery and 88,320 for 2008-09.

 

In other markets, CBOT oat futures finished weaker on profit-taking, a floor trader said. May oats slid 8 cents to US$3.78 1/2 per bushel.

 

Ethanol futures slipped. May ethanol closed down US$0.001 at US$2.541 per gallon, and June closed down US$0.009 at US$2.48.