April 29, 2009

 

CBOT Corn Review on Tuesday: Ends higher on weather concerns

 

 

Chicago Board of Trade corn futures ended higher Tuesday on forecasts for continued rain in the U.S. corn belt, traders said.

 

May corn ended up 2 3/4 cents at US$3.75 per bushel, and July corn ended up 2 3/4 cents at US$3.83 1/2.

 

Traders and weather forecasters said farmers are unlikely to make much planting progress this week, which is especially a problem in the already-delayed eastern corn belt.

 

"It's an east versus west scenario," said Joe Victor, vice president/marketing for Allendale. "West is doing great as far as planting progress; the east is in dire need to get this pattern changed."

 

He added that with each passing day, the potential grows for eastern corn belt farmers to switch to soybeans. Some analysts say farmers are not yet nearing that point, however.

 

Planting in Illinois was only 4% complete as of Sunday, compared with the average of 43%, while Indiana had planted 2% of the crop, compared with an average of 25%. In the western corn belt, Iowa and Minnesota were both ahead of schedule.

 

Short-term, 6-to-10-day and 15-to-30-day forecasts show more rain across the corn belt, analysts said.

 

The market was higher most of the day but fell to unchanged late in the day on pressure from soybeans, which broke lower early in the day and stayed more than a dime lower throughout.

 

Traders said spread trading was also a factor Tuesday. Concerns that farmers would switch to soybeans contributed to the buying of corn and selling of soybeans, traders said. Although planting progress remains below average, it is proceeding more quickly than it did last year, traders said.

 

Funds bought an estimated 5,000 contracts.

 

Traders said the market was boosted by short-covering following Monday's drop on the swine flu outbreak. Analysts said the flu is a threat to demand, but that Monday's reaction was overblown.

 

CBOT oats futures ended slightly lower. May oats were down 3/4 cent to US$1.86 1/4 per bushel, and July oats settled down 1/2 cent to US$1.95 1/2.

 

Ethanol futures were virtually unchanged. May ethanol was flat at US$1.555 per gallon, and July ethanol ended up US$0.001 at US$1.556.