May 27, 2009

 

CBOT Corn Review on Tuesday: Ends lower as trade awaits crop progress

 

 

Expectations that U.S. farmers completed a lot of planting during the past week sent Chicago Board of Trade corn futures lower Tuesday, analysts said.

 

July corn ended down 2 3/4 cents to US$4.27 1/2 per bushel and December corn ended down 1 3/4 cents to US$4.50 1/4.

 

The trade's focus was on the U.S. Department of Agriculture's crop progress report, which will be released at 4 p.m. EDT. The trade expects progress between 80% and 85% as of Sunday, with estimates climbing over the weekend thanks to a week's worth of dry weather in the U.S. corn belt that extended through Sunday.

 

Supportive outside markets, including equities and soybeans, limited losses, analysts said. A surge in soybeans prompted some short-covering, an analyst said.

 

"Corn was really just worried about progress numbers, and following beans after that," said Jerry Gidel, analyst for North America Risk Management Services.

 

There's still plenty of concern about the crop among some traders given that the crop is still not finished. Much of the corn belt is going to get rain Tuesday and Wednesday, which will further delay farmers that are behind.

 

"I think people are forgetting that just 5% of this crop is over 4 million acres," said Sid Love, analyst for Kropf and Love Consulting.

 

He added that there are questions about how much corn will need to be replanted due to excess rainfall.

 

For those farmers who have planted, the rain is mostly considered beneficial, on the idea that "rain makes grain."

 

Corn inspections for export were below expectations Tuesday. The USDA reported weekly inspections of 27.511 million bushels, down from 31.3 million the previous week. Analysts had expected inspections between 31 million and 39 million.

 

The market is seen as rangebound, with farmer selling and demand limiting the upside potential, and crop concerns limiting the downside.

 

CBOT oats futures ended lower. July oats ended down 1 3/4 cents to US$2.47 3/4 per bushel and December oats ended down 1 3/4 cents to US$2.67 3/4.

 

Ethanol futures were lower. June ethanol ended down US$0.020 to US$1.700 per gallon and July ethanol was down US$0.007 to US$1.710.