May 9, 2009

 

CBOT Corn Review on Friday: Climbs on dollar, crop delays, fund buys

 

 

Chicago Board of Trade corn futures continued their surge Friday, ending higher amid planting delays and fund-buying, analysts said.

 

May corn ended up 9 1/4 cents at US$4.14 per bushel, July corn ended up 9 cents at US$4.21 and December corn ended up 8 3/4 cents at US$4.39 3/4.

 

Corn has support both fundamentally and from outside markets, analysts said. Traders said that new money is entering corn and other commodity markets.

 

"With the dollar breaking hard and crude oil going higher and the severe planting delays in the eastern corn belt, corn looks very attractive to the Wall Street investors," said Arlan Suderman, analyst for Farm Futures.

 

Monday's U.S. Department of Agriculture weekly crop progress report is expected to show little progress in the eastern corn belt, and rainfall could continue to disrupt planting, weather forecasters said.

 

"There's no doubt we're going to be well behind the five-year average come Monday," an analyst said of the planting delays.

 

Some traders say plantings as of Sunday could be less than 50% complete, as the optimal window for planting begins to shut. Illinois and Indiana, the second- and third-largest corn-producing states, have suffered particularly strong delays.

 

Suderman said there was short-covering headed into the weekend. A trader said there were more people short in the market who "needed to get out" than there were people long in the market.

 

The trader added that there was corn-soybean spread trading Friday.

 

Another floor trader said the market's close above Thursday's high in the July contract was bullish technically. The July contract gained 7 1/4 cents on the week.

 

Suderman said the July contract is nearing the 200-day moving average of US$4.24 on a continuation chart. Price action next week could determine if that area becomes a seasonal high or if it becomes another green light for funds to buy, he said.

 

In other news, Informa Economics on Friday projected that U.S. corn acreage will total 83.9 million in 2009 while soybean acreage will come to 78.3 million, according to traders.

 

The corn acreage would be down 1.07 million from the U.S. Department of Agriculture's March estimate, and down from last year's acreage of 86.0 million.

 

In other markets, CBOT oats futures ended higher amid "tremendous technical buying by funds," a trader said. He said the market was propelled by Thursday's climb above the 100-day moving average, and although there has been some farmer selling, the fundamentals are supportive as poor weather hinders the crop in Canada.

 

July oats ended up 9 cents at US$2.26 per bushel and gained 19 cents on the week. September oats ended up 9 cents at US$2.34 1/2.

 

Ethanol futures were higher. June ethanol ended up US$0.022 at US$1.675 per gallon and July ethanol was up US$0.023 at US$1.688.