May 9, 2011

CBOT corn prices decrease

CBOT corn prices closed down US$0.22 per bushel on Friday (May 6) for two straight days and closed at US$6.82.

At least one trader said news of warm weather in Iowa prompted some selling on the notion that Midwest farmers were catching up on a delayed corn-planting season.

"I am hearing stories of huge gains in plantings, and even work being done in areas believed to be too wet," said an analyst. "Whether it is true or not, the market is perceiving broad acres are being planted."

Soy managed a weak, 1-cent-per-bushel rally to US$13.20. Wheat dropped US$0.06 to US$7.16.

A trader said that corn was singled out for the hit on Friday (May 6) because corn has had the highest fever. It has been bought heavily because there is little margin for error going into this year's crop.

The US government reported declines in both the ethanol grind and also in corn exports. The export news was considered by traders to be a signal that high prices would soften demand for US corn in international markets.
 

The analyst said some traders have been shaken by news of moves in Congress to cut the 45-cent-per-gallon tax credit for ethanol blending.

Corn prices have doubled since last June.