May 3, 2008

 

CBOT Corn Review on Friday: Corn dips slightly in choppy session

 

 

Chicago Board of Trade corn futures closed down slightly Friday in cautious trading, as mild profit taking and weather concerns made for a choppy session, traders and analysts said.

 

May corn was down 3 1/2 cents to US$6.02 per bushel, July was down 3 3/4 cents to US$6.13 1/2, and December corn was down 2 cents to US$6.29 1/2. Funds bought 3,000 contracts.

 

Some traders and analysts said there may have been some mild profit-taking ahead of the weekend. Uncertainty over weather forecasts and crop progress was helping to keep prices flat, some said.

 

Although weather has been generally wet across the Midwest with more rain in the forecast, there has been just enough scattered clearing to create uncertainty over how much has been planted, said Joel Kleist, a broker/analyst with Allendale in McHenry, Ill.

 

Either way, he said, it's clear farmers will "go to the last minute on planting their crop."

 

Traders and analysts on the floor said they were hearing Monday's U.S. Agriculture Department crop progress report could show plantings anywhere from 20% to 35%. The April 28 report showed just 10% progress, well below the 35% average. Yields are typically expected to decline for corn planted after mid-May.

 

The scattered nature of corn planting progress is evident in Iowa, where Iowa State Extension agronomist Roger Elmore said the western third of the state has seen more progress than areas east.

 

Overall, he said, it would "take a miracle" to get the state's planting progress by Sunday up to 33%, which was the average progress by April 28. But he's still preaching patience to growers, because "if you plant it in marginal conditions, you're going to get marginal performance."

 

"We're concerned, but we can plant the entire crop in 10 days," he added.

 

Corn's weak Friday performance, which came despite a bullish US$3.79 increase in crude oil, indicates that the backlash against ethanol is affecting the market, one analyst said.

 

"All the politicians are ganging up on corn," he said.

 

One trader said prices were largely the result of cautious traders.

 

"They're afraid to buy it here at this price level, and they're afraid to sell it, because if the weather stays like this we're going to start losing some serious acres," the trader said.

 

Corn still had a strong week, with May, July and December corn all gaining several cents. December corn hit all-time highs twice this week, including briefly on Friday, when it hit US$6.37 3/4.

 

Analysts also said weather forecasts remain bullish, with rain across the Midwest this weekend and more precipitation forecasted next week.

 

CBOT oat futures ended firmer on fund buying after early commercial selling ran out of steam, a floor trader said. May oats gained 4 1/4 cents to US$4.01 per bushel, and July oats rose 4 1/2 cents to US$4.12.

 

Ethanol futures closed mixed. May ethanol slipped 1 cent to US$2.48 per gallon, and June ethanol jumped 3.6 cents to US$2.474.