May 8, 2009

 

CBOT Corn Review on Thursday: Climbs on planting delays, technical support

 

 

Chicago Board of Trade corn futures ended higher Thursday on planting concerns, corn-soybean spread trading and technical strength, traders said.

 

May corn ended up 4 cents to US$4.04 3/4 per bushel, July corn ended up 4 1/2 cents to US$4.12, and December corn ended up 4 1/4 cents to US$4.31.

 

Prices rose amid worries about the U.S. planting pace, particularly in the eastern corn belt.

 

Rainfall this week and forecasts into next week do not bode well for farmers in the eastern corn belt trying to get their crop planted, analysts said.

 

"They may still have a window, but it's smaller than it first looked, and there's heavier rain after that," said Marty Foreman, analyst for Doane Advisory Services.

 

The development of the crop has become an "east versus west" scenario. Don Roose, president of U.S. Commodities in West Des Moines, Iowa, said that the western corn belt could be 80% planted by Monday's U.S. Department of Agriculture weekly crop progress report, while the eastern corn belt is only 10% planted.

 

Commodities in general had a supportive tonnee, traders said, as funds appear more willing to buy as the economy's slide shows signs of slowing.

 

"It looks like new money coming in," a trader said.

 

The market retreated from its highs later in the day, as crude oil and soybeans both retreated.

 

"You ran out of buying interest, and then had the profit-taking coming in there," said John Kleist, broker/analyst for Allendale.

 

He added that even before the soybeans broke, Thursday's trade was characterized by buying of corn and selling of soybeans.

 

Export sales were relatively weak, but Kleist said that might be an aberration because the reporting period was during the height of the swine-flu scare.

 

The July contract's high of US$4.20 was the contract's highest price since late January.

 

A couple of traders said that the concerns about planting delays are to some extent being used an excuse for corn's rally, but that fund buying is the main driver.

 

"We're behind, we have to keep it in perspective that it was mid-June when we had the flooding last year and we still put out a huge crop," Kleist said.

 

CBOT oats futures ended higher. July oats ended up 9 cents to US$2.17 per bushel and December oats ended up 9 cents to US$2.38 1/2. The July contract closed at its highest price since late January.

 

Ethanol futures were higher. June ethanol was up US$0.003 to US$1.653 per gallon and July ethanol was up US$0.018 to US$1.665.