April 25, 2007

 

CBOT Corn Review on Tuesday: Higher on lower corn planting pace

 

 

Chicago Board of Trade corn futures ended solidly higher Tuesday, drawing support from a lower-than-expected planting pace in Monday's U.S. Department of Agriculture weekly crop progress report, analysts said.

 

May corn rose 8 1/4 cents to US$3.60 1/2 per bushel, July gained 7 1/4 cents to US$3.71 1/4 and December rose 4 cents to US$3.72 1/2.

 

The lack of planting progress in the conditions report supported corn prices, said John Kleist, senior analyst at Top Third Ag Marketing.

 

The government reported that 11% of the U.S. corn crop had been planted as of April 22, below analyst expectations as well as the 22% seeded last year.

 

Technical strength also contributed to the gains. On Monday, December futures were able to hold above the lows set in early April and that helped to fill a downside gap to the upside on Tuesday, Kleist said.

 

The gains were limited to some extent as several analysts questioned the lack of planting progress in the report, citing anecdotal evidence of good plantings over the weekend.

 

Soybean-corn spread unwinding was also noted as corn's poor planting pace increases the potential for additional soy acres this spring. However, a commission house analyst said that given the outlay for corn seed and fertilizer, most farmers will stick to planting corn this spring.

 

Price direction will depend on the overnight weather forecasts, a floor trader said.

 

On technical charts, July futures remained below its 10-day moving average but above its 200-day moving average.

 

In open auction trading, Fortis bought 1,000 December and Rand purchased 800 May. FC Stonnee sold 500 may and JP Morgan sold 500 December.

 

Commodity fund buying was estimated at 5,000 contracts.

 

In options trading, ADM bought 1,000 December US$3.80 calls and sold 1,000 December US$4.00 calls.

 

Oat futures settled lower as light fund selling in December weighed on prices as did the continued roll out May and into July ahead of next week's delivery period, a floor analyst said. A bigger Canadian planted oat acreage estimate in 2007 was also negative for prices, the analyst added.

 

May oats settled 1 1/2 cents lower at US$2.52 1/2 per bushel and July finished 3/4 cent lower at US$2.57.

 

Ethanol futures settled higher in light trade with the May contract up 3.6 cents to US$2.186 per gallon. June ethanol rose 1.5 cents to US$2.125.