May 23, 2009

 

CBOT Corn Review on Friday: Ends higher on bearish dollar, wheat surge

 

 

Chicago Board of Trade corn futures ended higher Friday on support from the dollar, wheat and lingering crop concerns, analysts said.

 

July corn ended up 6 1/4 cents to US$4.30 1/4 per bushel and December corn ended up 6 1/2 cents to US$4.52. July gained 13 cents on the week.

 

The bearish dollar was a dominant theme late in the week. A weaker dollar makes U.S. exports more attractive.

 

"The dollar was able to ignite the wheat through fund buying," said Mike Zuzolo, senior analyst for Risk Management Commodities. "That helped the corn immensely."

 

The trade was wary of sending prices too high, however, because of the three-day holiday weekend and uncertainty about what would happen with weather in the meantime, analysts said. The market is closed Monday for Memorial Day.

 

After several days of dry weather, rain is expected to return to areas of the eastern U.S. corn belt Sunday or early next week. Zuzolo said that if farmers get a full day of planting Sunday, most of the crop will be in the ground.

 

"If we can keep open this weekend, most of the corn in the wettest areas will get planted," Zuzolo said.

 

Illinois and Indiana in particular remain well behind schedule in planting. Overall, the trade expects Tuesday's crop progress report to show planting around 80% completed.

 

The dollar's plunge is also reigniting inflation concerns, which would be bullish for commodities, although a trader says the current environment is far different than what the market saw in previous years because the global recession has depressed demand.

 

Analysts say Monday night's trade could be "interesting" depending on what weather develops in the meantime.

 

Technically the market looks strong. A trader notes the July contract is testing recent highs for the third time, and that "you rarely see a triple-top."

 

Funds bought an estimated 6,000 contracts.

 

In export news, private exporters reported to the U.S. Department of Agriculture export sales of 103,636 metric tonnes of corn for delivery to Japan. Of the total, 56,898 tonnes is for delivery during the 2009/2010 marketing year and 46,738 tonnes is for delivery during the 2008/2009 marketing year, the USDA said Friday.

 

CBOT oats futures posted sharp gains Friday. A trader noted fund short-covering. July oats were up 11 1/2 cents to US$2.49 1/2 per bushel and December oats ended up 10 1/2 cents to US$2.69 1/2.

 

Ethanol futures were higher. June ethanol ended up US$0.013 to US$1.720 per gallon and July ethanol settled up US$0.011 to US$1.717.