April 24, 2008

 

CBOT Corn Review on Wednesday: Down on profit-taking; choppy session

 

 

U.S. corn futures fell on profit-taking in a choppy session amid uncertainty in the weather forecasts that will affect the rate of spring planting, which is already behind schedule, analysts said Wednesday.

 

Nearby May corn fell 6 1/2 cents to US$5.87 3/4, July was down 6 1/4 cents at US$6.01 1/2 and new-crop December lost 6 1/2 cents to settle at US$6.12 1/2 a bushel.

 

Corn was influenced at times during the session by the fluctuations in crude oil, which began lower but ended the day higher after a mixed report on crude and distillate stocks.

 

Later, corn was swayed by speculation on how much rain areas of the Midwest will receive and how much further planting will be delayed, particularly in the western and central corn belt.

 

"We're getting to the point where farmers are going to push the issue a little bit," said Shawn McCambridge, senior grains analyst at Prudential-Bache in Chicago.

 

The market had already factored in the current round of rainy weather that is just now beginning to affect the far western belt, he said. Plantings are already behind schedule, with just 4% of the crop planted as of Sunday compared to the average pace of 17% seeded.

 

One southern Iowa corn merchandiser said he is looking for conditions that would signal improved planting weather but doesn't yet see it. The forecast "doesn't look all that spiffy for getting into the field in 85% of the state of Iowa this week," he said.

 

Reports of scattered planting in the eastern belt and far reaches of the western belt, however, helped create pressure in corn futures, he acknowledged.

 

Private forecaster T-storm Weather said a large-scale planting window is unlikely through next week, "though some planting is occurring and likely to continue in various areas."

 

Strong thunderstorms are forecast to move across the central and southern Plains and are expected to move northeast Wednesday night. The heaviest rains will occur through the western belt states of Iowa, Missouri and Minnesota over the next 24-36 hours, T-storm Weather said.

 

However, the eastern half of Illinois and areas east will stay mostly dry, which will allow planting to continue. Rains totaling 0.50 inch will occur late Friday as a strong cold front moves through Illinois and areas east. The colder weather that follows will likely complicate plans for producers ready to plant. A warming trend is expected for next week but may be accompanied by increasing chances of rain.

 

The six- to 10-day outlook calls for average to above-normal rainfall, DTN Meteorlogix said.

 

In addition to the forecasts, sharp losses in wheat and weakness in soybeans, related to general profit-taking, weighed on corn, a trader said.

 

Despite Wednesday's losses, corn futures still have underlying strength on expectations for reduced acreage this year as farmers plant more soybeans and continued strong demand for ethanol and livestock feed.

 

Funds sold an estimated 3,000 corn contracts to lead the selling interest.