May 19, 2009

 

CBOT Corn Review on Monday: Ends higher on crude, soybeans

 

 

Chicago Board of Trade corn futures ended higher Monday as spillover support from outside markets outweighed a bearish drier weather pattern, analysts said.

 

July corn ended up 4 1/4 cents to US$4.21 1/2 per bushel, September corn ended up 4 cents to US$4.30 3/4, and Dec corn ended up 3 1/2 cents to US$4.42.

 

Higher crude oil, strength in soybeans and surging equities helped pull the market higher after a weak open, analysts said.

 

"Generally there was a favorable environment for more money to flow (into commodities), and I think corn was largely a benefactor," said Arlan Suderman, analyst for Farm Futures.

 

Despite the move on outside influences, the market's movement will continue to be dictated by weather forecasts and planting progress, as the planting window starts to narrow in the corn belt, analysts say.

 

Sunny, dry weather in the eastern corn belt this week is seen as bearish and weighed on prices at the open, traders said.

 

But some traders and analysts note that parts of the eastern corn belt will need most if not all of the week just to dry out.

 

"Guys are telling me if they can spray by Wednesday they'll be happy," said Dave Marshall, an independent broker and advisor in Nashville, Ill.

 

Planting is well behind schedule there and elsewhere in Illinois, and "those who did planting may wish they had their seed back," Marshall said. Analysts say the heavy rains late last week might have "drowned" seeds that had just been planted.

 

Prices closed 4 to 5 cents off their intraday highs. "I think we saw at the end of the day, 'ok, we've had fun today, let's kind of square positions a little bit until we se USDA's numbers out this afternoon,'" Suderman said.

 

Suderman also noted that Darrel Good, a University of Illinois extension economist, released a report Monday questioning whether the corn market was being too complacent about planting delays. The report said that based on a model assuming average weather from here on out, the crop in Illinois could be expected to yield 157.4 bushels per acre, down almost 22 bushels from last year. Similar results could be expected in Indiana and Ohio, Good said.

 

In demand news, the U.S. Department of Agriculture reported weekly corn inspections for export of 31.024 million bushels, down from 46.512 million the previous week. Analyst estimates ranged from 32 million to 40 million.

 

The trade is expecting Monday afternoon's crop progress report from the U.S. Department of Agriculture to show 60% to 65% of the crop planted, well below average.

 

CBOT oats futures ended higher. July oats ended up 7 3/4 cents to US$2.35 3/4 per bushel and December oats ended up 7 1/2 cents to US$2.56 1/2.

 

Ethanol futures were higher. Both June and July climbed US$0.017, with June ethanol settling at US$1.695 per gallon and July ethanol closing at US$1.710.