May 7, 2009

 

CBOT Corn Review on Wednesday: Ends higher on crude oil, soybeans

 

 

Strength in outside markets pushed Chicago Board of Trade corn futures higher Wednesday, traders said.

 

May corn ended up 2 1/4 cents to US$4.00 3/4 per bushel, July corn ended up 2 1/4 cents to US$4.07 1/2, and December corn ended up 1 3/4 cents to US$4.26 3/4.

 

Weather and planting conditions are a focus of the market, but without any clear directive from the weather, corn took its cue from outside influences. Neighboring soybeans continue to surge, requiring corn to keep pace because both compete for the same acres, an analyst said. Equities and crude oil were also higher as the economy shows signs of turning.

 

"I think there was a little more optimism out there today," said Sid Love, analyst for Kropf and Love Consulting. "We saw a turnaround in a lot of other things as well."

 

The market traded a tight range for the second straight day, of between 5 and 6 cents.

 

Farmer selling is limiting upside potential, but end-users continue to find buying opportunities on breaks, said Kent Beadle, analyst for Country Hedging.

 

"What I'm seeing is the western corn belt producer fairly engaged in selling corn on the rallies," Beadle said.

 

While farmers in the eastern corn belt are scrambling to plant their behind-schedule crop, "the western corn belt farmer is in a bit of lull right now" and has time to sell, Beadle said. "He's got his corn planted. Many of them are waiting another week to plant soybeans because the time isn't right yet."

 

Beadle said his "overall bias is slightly bullish" because of the crop's slow planting pace and signs that the economy is starting to turn around, which should improve feed demand.

 

Analysts say that currently demand seems relatively weak, particularly for ethanol and feed usage.

 

CBOT oats futures ended higher. July oats ended up 3 3/4 cents to US$2.08 per bushel and September oats ended up 3 3/4 cents to US$2.16 1/2.

 

Ethanol futures were higher. June ethanol ended up US$0.019 to US$1.650 per gallon and July ethanol ended up US$0.009 to US$1.647.