May 5, 2009

 

CBOT Corn Review on Monday: Ends lower on weather, wheat

 

 

An improved weather picture, pressure from wheat and technical weakness pushed Chicago Board of Trade corn futures lower Monday, traders said.

 

May corn ended down 8 1/4 cents to US$3.98 per bushel, and July corn ended up 8 1/4 cents to US$4.05 1/2.

 

After several days of heightened concerns about planting delays that helped rally prices, traders said farmers appear to have better conditions over the next couple of weeks.

 

"It's still a showery outlook, but the trade became comfortable that amounts aren't as heavy," a trader said.

 

Traders said the market was short-term overbought after last week's gains, and that farmer selling continues to keep a lid on the market.

 

A trader called wheat, which lost 18 to 19 cents, the "weak sister" on the floor and said it weighed on corn. "Fairly weak" export sales also weighed, another trader said.

 

The U.S. Department of Agriculture reported export inspections of 30.170 million bushels for the week ended April 30, down from 34.291 million the previous week. Trade estimates were between 30 million and 35 million.

 

Jerry Gidel, analyst for North America Risk Management, noted that corn was "a very reluctant participant" in Friday's widespread rally.

 

"There's still this attitude that we've got plenty in our pockets, the crop is going to be planted, even if we lose a little bit we're not going to go crazy," Gidel said.

 

Traders and analysts said the market needs a steady diet of bad weather forecasts in order to keep from sliding.

 

"We're trying to put a floor in, but it's tough to talk it up," a trader says.

 

Fundamentally, soybeans remain the strongest market, an analyst said.

 

"I think the corn is going to, in essence, continue to encourage people to plant beans over corn, at this point, and in general not be as cooperative as it should be," Gidel said.

 

Traders continue to note the swine flu as a potentially bearish factor in the market because of its effect on pork production. They say it is currently not a strong factor, but could hurt feed demand later on.

 

CBOT oats futures ended lower. May oats ended down 4 cents to US$1.96 per bushel and July oats settled down 6 cents to US$2.01.

 

Ethanol futures were lower. May ethanol ended down US$0.018 to US$1.615 per gallon and June ethanol closed down US$0.012 to US$1.625.