May 10, 2008

 

CBOT Corn Review on Friday: Close mixed on profit-taking, weather

 

 

Corn futures were mixed in Chicago Board of Trade trading Friday amid a tug-of-war featuring profit-taking, rainy weather and the government's supply and demand report, traders and analysts said.

 

May corn ended down 1/4 cent to US$6.18 1/2, July corn settled down 1 cent to US$6.29 1.4, and December corn finished up 3 3/4 cents to US$6.50.

 

"It's Friday, people are going to the bank," one trader said.

 

Analysts and traders were split on whether Friday morning's U.S. Department of Agriculture supply and demand report was bullish or bearish, but they agreed the lasting impact was not significant.

 

The report projected ending U.S. corn stocks for the 2007-08 marketing year at 1.383 billion bushels, an increase of 100 million from the USDA's April projection. One analyst said that could have pushed prices 3-4 cents lower. He and others said the USDA's projection that 2008-09 ending stocks would drop to 763 million bushels was more significant.

 

Analysts said that number was based on optimistic predictions that feed and residual use would fall 14% and exports would fall 16%. The report didn't factor in the soggy spring weather that is keeping farmers idle and could likely reduce yield and harvest.

 

"I think they had to work to get the numbers where they were," said Jack Scoville, an analyst at Price Futures Group.

 

A trader said the market continues to focus on planting delays across the U.S. corn belt.

 

"It's still a weather market," the trader said.

 

Weather forecasts call for rain and thunderstorms this weekend across the Midwest, and another rain system next week.

 

Traders said estimates for the USDA's crop progress report, to be released Monday afternoon, ranged from 40% to 60% of plantings completed. Traders said the average done as of this date was about 75%.

 

Early in the day, corn contracts set record and contract highs for the second day in a row. May's high was US$6.27, July's high was US$6.37 1/2 and December's high was US$6.55.

 

CBOT oat futures were mixed in choppy trading. May oats were up 1/2 cent to US$4.05 per bushel, July oats were down 1 1/2 cents to US$4.13 and December oats were down 1 1/2 cents to US$4.38 1/2. A trader said there was heavy commercial buying early in the day, but prices fell after that.

 

Ethanol futures ended higher. June ethanol closed up US$0.009 at US$2.604 per gallon, and July ethanol closed up US$0.012 at US$2.571.