May 13, 2008

 

CBOT Corn Review on Monday: Down on long-range weather forecast

 

 

Long-range weather forecasts that raise the possibility of improved planting conditions helped push Chicago Board of Trade corn futures lower Monday, traders and an analyst said.

 

May corn ended down 15 cents to US$6.03 1/2 per bushel, July corn settled down 14 1/2 cents to US$6.14 3/4, and Dec corn ended down 12 1/4 cents to US$6.37 3/4. Funds sold 5,000 contracts.

 

A trader said in addition to a drier weather forecast for next week, prices were pushed lower by some light profit-taking. Even with the break, corn prices aren't cheap.

 

"It's still US$6 corn," he said.

 

Traders and analysts were also awaiting Monday afternoon's crop progress report from the U.S. Department of Agriculture. A trader said a report showing more than 50% of corn planting completed would be seen as bearish, while less than 50% would be seen as bullish. Estimates from traders and analysts have ranged from 40% to 60%. In its report, USDA said 51% of the crop is seeded as of Sunday versus 71% a year ago and 77% for the five-year average.

 

Traders said despite Monday's losses, the weather should remain supportive, as farmers are well behind on their plantings.

 

Jerry Gidel, a grain analyst with North American Risk Management Systems, said even next week's improved weather forecast still calls for less-than-ideal planting conditions. He described traders as "skittish."

 

"The market is looking for shadows all over the place," he said.

 

He added that technical charts showed weakness, and the political backlash against ethanol is weighing on many traders' minds.

 

DTN Meteorlogix says the 10-day weather pattern should allow for "slightly improved fieldwork." Drew Lerner of World Weather Inc., who is also calling for drier weather next week, cautioned that northern parts of the corn belt will still see rain, and that overall most growers will not be able to plant for prolonged periods.

 

Chicago Board of Trade oats futures closed slightly lower in light trading, a trader said. Despite the decline, the trader said funds are continuing to buy oats. July oats were down 3 cents to US$4.10 per bushel and September oats were down 5 1/4 cents to US$4.20 1/4.

 

Ethanol futures ended lower. June ethanol closed down US$0.027 at US$2.577 per gallon, and July ethanol closed down US$0.031 to US$2.54.