April 27, 2006

 

CBOT Corn Review on Wednesday: Firmer, but off highs in quiet trade

 

 

Corn futures at the Chicago Board of Trade rose slightly Wednesday in quiet trade, but settled off session highs as wheat turned softer ahead of the close.

 

Most-active July corn rose 1 cent to US$2.43 1/4 a bushel, while May gained 1/2 cent to US$2.31 1/2. New-crop December gained 1/2 cent to US$2.66 1/4.

 

July corn traded in an inside trading day on day-only price charts, meaning the boundaries of the previous day's range exceeded Wednesday's trading range.

 

"We went up a little in concert with wheat, but then when wheat turned lower" corn curbed gains, said Joel Karlin, analyst and sales manager at Intergrated Grain & Milling. Calls for rains in parts of Kansas in the 48-hour forecast pulled down wheat, Karlin said. Extreme dryness in wheat areas has hurt crop conditions for hard red winter wheat recently.

 

Some of that rain could head into the western corn belt, which would delay spring corn seeding, which was mildly supportive.

 

However, Karlin said, while it might hinder farmers from getting crops in the ground, ultimately the precipitation will be a benefit for crops, providing subsoil moisture in the summer.

 

Floor sources said export sales in Thursday's U.S. Department of Agriculture's weekly export sales report should be solid, which also underpinned trade. Trade estimates ranged from 700,000 to 1 million metric tonnes.

 

Other activity was quiet.

 

"The cash market is tight, but it's not enough for farmers to get up off their tractor and (sell). Plus outside markets were higher, too," Karlin said.

 

Floor traders noted spreading of May-July corn futures was a feature ahead of first notice day for May on Friday.

 

In other news, Ohio planting progress is far behind schedule, as farmers there hold off on planting the crop as early as they did last year, when weather problems caused some producers to replant.

 

Since gapping sharply higher on technical charts after the March 31 prospective plantings report, corn futures have chopped quietly.

 

There is some interest to fill the upside gap, Karlin said, but with sizable interest to buy up corn if that happens, it's unlikely the market would extend gains, he said.

 

In other news, the CBOT approved the Aug. 1 start of side-by-side electronic and pit traded agriculture products. Currently electronic trade is relegated to overnight activity. Traders said the success of electronic trade will depend on trading fees.