May 2, 2009

 

CBOT Corn Review on Friday: Strong gains on weather, wheat, soy

 

 

Planting concerns and support from surging wheat and soybean markets pushed Chicago Board of Trade corn futures higher Friday.

 

May corn ended up 10 cents to US$4.06 1/4 per bushel and July corn ended up 10 1/4 cents to US$4.13 3/4.

 

Wheat and soybeans both gained more than 30 cents amid short-covering a technical strength, boosting corn, traders said.

 

Weather remains the dominant fundamental focus of the market, as the trade worries about planting delays extending through next week. The eastern and southern areas of the corn belt in particular are behind schedule, and western areas likely saw little planting progress this week, analysts said.

 

The delays have prompted speculation about how many farmers might switch their corn acres to soybeans, which have a later growing season.

 

The nearby May contract, which is in delivery, surged past US$4, which has been resistance in recent weeks due to the looming presence of farmer selling.

 

Producers still have a lot of grain to unload, analysts said, but are either too busy planting or convinced the market still has more upside.

 

"Even if they got their plantings done, they're looking at the board, they're listening to the commodities markets, and saying hmm, maybe I won't be in such a hurry," said John Kleist, broker/analyst with Allendale.

 

A trader said he was surprised corn wasn't stronger given the climbs in wheat and soybeans. Corn was slow to follow those markets, although it did surge late, closing at or near session highs.

 

"The funds came for beans and wheat -- maybe they had enough corn," the trader said.

 

The July corn contract gained 28 cents on the week, and corn is in a technically strong position above all major moving averages.

 

Export demand is a supportive feature, with weekly sales consistently topping 1 million metric tonnes, putting the U.S. on pace to possibly surpass the government's export projection for the marketing year, analysts said. Ethanol demand and feed demand are more questionable, with the swine flu outbreak and its depressing effect on pork producers possibly pointing to less feed future feed demand.

 

CBOT oats futures ended higher. May oats ended up 6 cents to US$2.00 per bushel and July oats climbed 4 cents to US$2.07.

 

Ethanol futures were higher. May ethanol ended up US$0.023 to US$1.633 per gallon and June ethanol ended up US$0.033 to US$1.637.