May 21, 2009

 

CBOT Corn Review on Wednesday: Up slightly; trade eyes weather next week

 

 

Chicago Board of Trade corn futures ended less than a penny higher Wednesday as the trade grappled with an ambiguous weather outlook.

 

July corn ended up 1/4 cent to US$4.26 per bushel and December corn ended up 1/4 cent to US$4.47 1/4.

 

The market had early support from outside markets and from ideas that rainfall was going to arrive in the eastern U.S. corn belt on the weekend before farmers there had a chance to get much planting done.

 

The market lost opening gains around mid-day, following a retreat in old crop soybeans. Corn ended about 8 cents off its highs.

 

Traders said a slight change in mid-day weather forecasts might have added to the pressure, as projected rainfall was pushed back to early next week. Farmers in Illinois and Indiana are in the midst of a week of warm, dry weather, but analysts say they may need all of that just in order for the ground to dry out.

 

"The market seems to be biding its time, trying to assess how much is getting planted at this time," said Shawn McCambridge, senior grains analyst with Prudential Bache. "Really that's the only fundamental feature we have in the market right now."

 

Traders and analysts added that the corn market seemed to run out of gas after recent strength. McCambridge said there wasn't a lot of "dedication" among market longs at current price levels.

 

Farmers continue to use rallies as an opportunity to unload some of their supplies, keeping a lid on the market, traders added.

 

"Corn right now is still running into producer selling," a floor trader said.

 

Outside markets were supportive, with a weakening dollar and strong crude oil prices setting the tonnee for commodities. Soybeans also ended higher.

 

Some traders said purchases by South Korea and Taiwan this week were also supportive, although others say demand is a non-factor in the current market.

 

CBOT oats futures ended higher. July oats ended up 4 1/2 cents to US$2.38 1/2 per bushel and December oats ended up 4 1/2 cents to US$2.59 1/2.

 

Ethanol futures were mostly higher. June ethanol was up US$0.008 to US$1.719 per gallon and July ethanol ended flat at US$1.715.