May 30, 2009

 

CBOT Corn Review on Friday: Ends at new highs on exports, weak dollar

 

 

A tumbling U.S. dollar drove gains Friday in Chicago Board of Trade corn futures, which ended at new recent highs.

 

July corn ended up 7 1/2 cents to US$4.36 1/4 per bushel, and December corn ended up 7 cents to US$4.59 1/4.

 

The market climbed early on technical buying and support from the weaker dollar and stronger crude oil, traders said.

 

"I'm looking at a chart of the crude oil and the U.S. dollar and they're exactly inverse of each other, and that pretty well explains the markets today," said Joel Karlin, analyst for Western Milling.

 

A weaker dollar makes U.S. exports more attractive, and higher crude oil is supportive because of corn's tie to the energy market through ethanol.

 

Trouble getting the crop into the ground in the eastern U.S. Corn Belt remains a concern of the market. Most expect planting progress to be around 91% to 92% in Monday's crop progress report from the U.S. Department of Agriculture.

 

Corn and spring wheat farmers are looking at relatively favorable fieldwork environments into the weekend, but rain may begin next week along with cooler temperatures, meteorologists said Friday.

 

The majority of the Midwest won't see much precipitation until Sunday night, with sporadic coverage and some thunderstorms until then.

 

Strong export sales which exceeded 1 million metric tonnes for the 2008-09 and 2009-10 crop years combined added support Friday, traders and analysts said.

 

"These numbers should continue to be good as the corn available out of South America should be limited and the world will have to come to the U.S. for their needs," Linn Group analyst Jim Riley said in a market commentary.

 

The market ran into a little headwind from farmer selling, a trader said, but corn surged late, breaking through recent resistance. The weaker dollar and a growing appetite for commodities among funds is driving the gains, analysts said.

 

"I don't think they're focusing on fundamentals at all right now," adds Paul Beere, analyst for Prime Ag Consultants.

 

July corn gained 6 cents on the week and 32 3/4 cents for the month of May.

 

CBOT oats futures ended slightly higher Friday. A trader said fund-buying continues, but that oats has struggled versus other markets the past couple of days. July oats ended up 1 cent to US$2.51 per bushel and December oats ended up 1 cent to US$2.70 3/4.

 

Ethanol futures were higher. June ethanol ended up US$0.016 to US$1.730 per gallon and July ethanol settled up US$0.021 to US$1.746.