May 12, 2009

 

CBOT Corn Review on Monday: Mixed; Caution Ahead Of USDA Report

 

 

Chicago Board of Trade corn futures ended mixed Monday as traders showed caution ahead of Tuesday's supply and demand report.

 

May corn ended down 1/2 cent to US$4.13 1/2 per bushel, July corn ended up 1/4 cent to US$4.21 1/4 and December corn ended up 1/2 cent to US$4.40 1/4.

 

Weaker equities and soybeans weighed on the market, as investors took profits in a variety of markets following last week's gains. Some traders said drier long-range forecasts were also a factor.

 

But other analysts say the eastern corn belt continues to see very little planting, and that the delays are bullish. Mike Zuzolo, senior analyst for Risk Management Commodities, said the trade continues to work on the theory that this year's crop will turn out fine because last year's crop, which faced significant planting delays and flooding, turned out good. He called that theory "bunk" and said cash prices will soon rise to reflect the situation, pulling futures with them.

 

A floor trader said he expects prices to hold firm until the crop is planted. Once that happens, however, the crop will be in good shape because of the excellent soil moisture throughout the corn belt, he said.

 

"I still get the feeling we're setting ourselves up for a seasonal top on this thing," a trader says.

 

Prices were lower all day before rebounding late. A trader said the market performed well given the pressure from outside markets.

 

The trade is expecting only minor changes to old crop carryout in the supply and demand report, set for release Tuesday at 8:30 a.m. EDT. Analysts expect to see a more significant shift in 2009-10 carryout, which could drop due to a reduced crop this year and rebounding demand.

 

Expectations for Monday afternoon's crop progress report vary widely, with most estimates of planting ranging from 45% to 55% complete. The report will be released at 3 p.m. EDT.

 

CBOT oats futures ended higher. July oats ended up 6 3/4 cents to US$2.32 1/2 per bushel and December oats ended up 6 1/4 cents to US$2.53 1/2.

 

Ethanol futures were higher. June ethanol ended up US$0.016 to US$1.691 per gallon and July ethanol ended up US$0.012 to US$1.700.