May 28, 2009

 

CBOT Corn Review on Wednesday: Down slightly as market awaits direction

 

 

Chicago Board of Trade corn futures ended slightly lower on outside market pressure following a day of tight, two-sided trade.

 

July corn ended down 1 1/2 cents to US$4.26 per bushel, September corn ended down 1 1/2 cents to US$4.36 1/4 and December corn ended down 1/2 cent to US$4.49 3/4.

 

The market bounced on either side of unchanged throughout the day Wednesday, but didn't move far in either direction. A stronger dollar and weaker equities were factors in corn's slump late in the session, a trader said.

 

Weather forecasts and planting progress remain the focus of the market, but they aren't providing a clear direction at the moment. Traders will lack conviction until a clearer picture emerges, an analyst said.

 

"I think right now we're pretty much just biding our time for the next week or two, just to see how the weather sorts out, how much more acreage we can get planted," said Shawn McCambridge, senior grains analyst for Prudential Bache. There are growing expectations that corn will lose acreage because of the delays, although analysts say farmers can wait at least a few more days before abandoning their intentions.

 

Weather was considered supportive Wednesday, as rains continue in the U.S. corn belt and forecasts called for more rain in the six- to 10-day and 11-to 15-day period, traders said.

 

Farmers made good progress last week but, with 18% of the crop yet to be planted as of Sunday, they will need another good planting window to finish up. If the next few weeks are wet, some corn won't get planted this year, analysts said.

 

The market remains range-bound, with buyers disappearing on the rallies and re-emerging on the breaks, analysts said. The market once again lost momentum Wednesday around US$4.50 in the December contract.

 

"The demand isn't there, and if it was we'd be a lot higher than where we're at," a trader said.

 

Traders said a surge in wheat Wednesday was supportive, and that there was some buying of wheat and corn and selling of soybeans.

 

Funds sold an estimated 2,000 contracts Wednesday.

 

CBOT oats futures ended higher. July oats ended up 6 cents to US$2.53 3/4 per bushel and December oats settled up 5 3/4 cents to US$2.73 1/2. The July contract has climbed 50 3/4 cents this month, due more to an infusion of fund-buying than supply-and-demand fundamentals, analysts said.

 

Ethanol futures were higher. June ethanol was up US$0.003 to US$1.703 per gallon and July ethanol ended up US$0.004 to US$1.714.