April 21, 2009

 

CBOT Corn Review on Monday: Ends lower as crude, equities pressure

 

 

A tumble in the equities and crude oil markets pushed Chicago Board of Trade corn futures lower Monday, although the market rebounded from early lows.

 

May corn was down 6 3/4 cents to US$3.69 1/2 per bushel, July corn ended down 7 cents to US$3.78 3/4, and December corn settled down 8 1/4 cents to US$3.98 3/4.

 

Crude oil fell more than US$4, and the Dow Jones Industrial Average lost more than 250 points during the session, setting the tonnee for commodities.

 

Planting conditions were seen adding pressure, although Chad Henderson, an analyst for Prime Ag Consultants, noted that while conditions have been good in the western U.S. corn belt, areas in the east are still having trouble.

 

"I think right now you look at this market, perception is reality in the futures markets, and the perception is the focus on the western corn belt and everything's great," Henderson said.

 

Traders estimate the U.S. Department of Agriculture's crop progress report Monday afternoon will show planting progress between 4% and 7%.

 

Henderson expects corn to hit a low Monday or Tuesday, and then rebound later in the week. But a floor trader sees the market continuing to slide on technical pressure unless the weather turns worse.

 

"You might be getting cheap enough, but these charts are looking really sloppy," the trader said.

 

Weak feed demand and concerns about ethanol demand are weighing on corn, traders said. There is concern that California will pass new standards this week that would assess corn ethanol's environmental impact based on land-use changes among other factors.

 

The market bounced off of an initial low of US$3.60 1/2 in early trading Monday. Traders said corn's rebound was due to traders taking profits following last week's spread action with wheat and soybeans.

 

CBOT oats futures ended lower. May oats were down 7 1/4 cents to US$1.81 3/4 per bushel and July oats were down 7 1/4 cents to US$1.90 1/2.

 

Ethanol futures were lower. May ethanol ended down US$0.034 to US$1.540 per gallon and June ethanol ended down US$0.028 to US$1.560.