May 8, 2008

 

CBOT Corn Review on Wednesday: Higher on wet weather

 

 

Chicago Board of Trade corn futures closed higher Wednesday on continued planting concerns.

 

May corn was up 6 3/4 cents at US$6.01 1/2 a bushel, July corn was up 6 3/4 cents at US$6.13 and December corn is up 7 cents at US$6.30 1/2. Those contracts closed 4-5 cents off the session highs.

 

Traders and analysts said weather was a dominant factor Wednesday, as forecasts call for more rain in U.S. corn-planting regions into next week. An analyst said prices were supported by heavy rain overnight in Iowa, where growers are already well behind in planting.

 

Iowa State University Extension agronomist Roger Elmore said the heavy rains brought a halt to planting for many farmers who had just started Sunday.

 

The U.S. Department of Agriculture's May 5 planting progress report showed Iowa had planted only 18% through Sunday, down from 42% last year and below a five-year average of 64%.

 

Elmore said that in areas that got as much as three or four inches of rain, which was common in central parts of the state, farmers will have to wait a week for the soil to dry out, meaning they won't resume planting until May 14.

 

"People are going to be more frustrated than they have been," Elmore said. But he added that farmers can get the whole state's crop planted in a week.

 

In addition to weather, prices were supported by crude oil, which closed at a record high for the third consecutive day, above US$123 per barrel.

 

Some traders and analysts said prices would normally climb higher given the jump in crude, but the stronger dollar put downward pressure on the market. A stronger dollar would likely mean more long-term weakness long-term for corn and other commodities, they said.

 

John Kleist, a broker analyst with Allendale in McHenry, Ill., said the market has continued on a sideways path recently, and has been unable to break through to new highs.

 

"When we try for highs, we fall back pretty back hard," he said.

 

He expects the market to continue trading sideways until Friday's supply-and-demand report from the USDA.

 

CBOT oat futures slumped in a quiet trade on bearish supply news, a floor trader said. Statistics Canada pegged oat stocks as of March 31 at 2.017 million tonnes, up from 1.548 million a year earlier. The news was interpreted as bearish, although industry members had expected to see stocks of 1.750 million to 2.142 million.

 

"I think the stocks were quite ample," a CBOT floor trader said.

 

July oats closed down 4 cents at US$4.15 1/2.