April 22, 2009

 

CBOT Corn Review on Tuesday: Up amid short-covering, planting concerns

 

 

Chicago Board of Trade corn ended higher in a short-covering bounce, with support from soybeans and concerns about planting, analysts said.

 

May corn ended up 4 1/2 cents to US$3.74 per bushel, July corn ended up 4 1/4 cents to US$3.83, and Dec corn ended up 4 3/4 cents to US$4.03 1/2.

 

Tuesday's gains were an extension of action late Monday, when prices rebounded off of session lows. The bounce was fueled by short-covering and ideas the market was oversold in the short term, traders said.

 

"I don't know if there's too much to read into it, you probably just had a bounce after yesterday's sell-off," said Jim Riley, analyst for Linn Group. "You saw it happen at the end of the day yesterday."

 

The USDA's crop progress report Monday showing delayed planting throughout the corn belt was seen as supportive. Analysts noted that delays are pervasive, both in marginal corn-growing states such as Missouri and Kentucky and in key states such as Illinois, where planting has barely begun.

 

Wet weather forecasts calling for more rain at the end of the weekend and into early next week also offered support, some analysts said. Mike Tannura, meteorologist with T-storm Weather, said that after a few days of ideal dry, warm weather, a pattern of thunderstorms will arrive in the corn belt late Saturday and extend into early next week, delaying planting.

 

But traders and analysts said the rally was not driven by fundamental news. If the weather was that big a factor, a floor trader said, then corn wouldn't have lagged so far behind soybeans, which gained 20 cents or more during the session.

 

Riley noted that "if last year taught us anything, it's that we can plant corn late and still get a decent yield."

 

A bump in outside markets, particularly crude oil and equities, late in the session also aided corn's rise, traders said.

 

CBOT oats futures ended higher. May oats ended up 2 1/2 cents to US$1.84 1/4 per bushel and July oats settled up 2 1/2 cents to US$1.93.

 

Ethanol futures were higher. May ethanol was up US$0.013 to US$1.533 per gallon and June ethanol ended up US$0.014 to US$1.564.