May 22, 2009

 

CBOT Corn Review on Thursday: Down slightly; pre-holiday positioning

 

 

Chicago Board of Trade corn futures ended slightly lower as traders eyed weather forecasts and entered "holiday mode" ahead of the three-day Memorial Day weekend, analysts said.

 

July corn ended down 2 cents to US$4.24 per bushel, and December corn ended down 1 3/4 cents to US$4.45 1/2.

 

The recent string of warm, dry weather in the central and eastern corn belt is easing concerns about the crop and weighing on the market, as farmers get out into their newly-dried fields to plant, analysts said. Planting progress in Illinois and Indiana is far behind schedule, and was pushed further back by heavy rains last week.

 

"Not that it gets us out of the woods by any means, but the reality is we'll see a sizable jump in those [planting] numbers," said Jason Britt, president of Central State Commodities.

 

Although the trade has mixed views about how much planting will get done before more rains return, likely late in the weekend or early next week. But this week's weather has certainly helped the farmers' cause, analysts said.

 

"I think in the state of Illinois I'd be shocked if there was a planter anywhere in the state sitting in the shed tomorrow," said Chad Henderson, analyst with Prime Ag Consultants.

 

Henderson said the market is trading between clearly defined support around the 40-day moving average of US$4.25 in the December contract and resistance at last week's high of US$4.55 1/2.

 

"I look at a corn chart right now and I say the lines in the sand are drawn," Henderson said.

 

Some analysts said a dip in weekly net export sales reported Thursday weighed, although some say demand is only a minor factor in the current market.

 

"Weekly export sales this morning were near the bottom of the expectations, but I don't know if the market is really paying attention to the export sales right now," said Jim Riley, analyst with the Linn Group, in a market commentary.

 

Outside markets, including weaker crude oil and equities, also weighed, traders said. Traders expect continued caution Friday ahead of the weekend, due to the uncertain nature of the weather forecast.

 

CBOT oats futures ended slightly lower. July oats ended down 1/2 cent to US$2.38 per bushel and December oats ended down 1/2 cent to US$2.59.

 

Ethanol futures were slightly lower. June ethanol ended down US$0.012 to US$1.707 per gallon and July ethanol ended down US$0.009 to US$1.706.