April 23, 2009

 

CBOT Corn Review on Wednesday: Down slightly; trade eyes weather

 

 

Chicago Board of Trade corn futures fell Wednesday amid cautious, two-sided trade in the absence of any significant news.

 

May corn ended down 1/2 cent to US$3.73 1/2 per bushel, and July corn ended down 1/2 cent to US$3.82 1/2.

 

The market traded in a tight range Wednesday, as traders eye weather forecasts and their potential impact on U.S. corn belt planting, which is behind schedule.

 

"I think everybody's waiting for the next shoe to drop on the weather to see if we get it planted or not," said Sid Love, analyst for Kropf and Love Consulting.

 

Views of the weather are mixed. Warm summer-like weather is expected over the next few days, but forecasts are calling for rain late in the weekend and into early next week.

 

Other than soybeans, which were mixed Wednesday, weather is seen by many as the key underpinning support for the market. But others dismiss concerns about the weather delaying planting and leading to reduced yields.

 

"I don't believe it and I think the market's telling us that it's not concerned about it," an analyst said. "I don't see anything real friendly out here to tell you the truth."

 

AccuWeather.com said Friday that longer spells of sunny and warm weather are expected over the next two to three weeks.

 

Demand is seen by many analysts as weak, particularly for feed and ethanol, although Love said it appeared demand was firming up.

 

Export demand remains strong, with another 110,000 metric tonnes purchased by South Korea Wednesday. Some analysts say that demand from South Korea is likely to slow, however.

 

Love added that farmer selling, which hovered over the market recently, has stopped since the market's recent break. He said that now that it has stopped, producers and might not resume selling until the crop is planted, giving the market a little room to breath.

 

Funds sold an estimated 2,000 contracts Wednesday.

 

In other news, The Buenos Aires Cereals exchange lowered its forecast for Argentina's 2008-09 corn production on Wednesday by 500,000 tonnes to 13 million tonnes due to the drought damage.

 

To date, farmers have harvested over 70% of the corn area, according to the exchange. Yields are so poor in many areas that farmers are just turning the fields over to pasture, the exchange said.

 

CBOT oats futures ended lower. May oats ended down 2 cents to US$1.82 1/4 per bushel and July oats settled down 2 cents to US$1.91.

 

Ethanol futures were lower. May ethanol settled down US$0.011 to US$1.542 per gallon and June ethanol ended down US$0.009 to US$1.555.