June 10, 2008

 

CBOT Corn Review on Monday: Higher on weather; awaiting USDA reports

 

 

Stormy weather pushed Chicago Board of Trade corn futures higher Monday, although traders cautious ahead of government reports Monday and Tuesday limited gains, analysts said.

 

July corn was up 6 1/2 cents to US$6.57 1/2, September corn was up 6 3/4 cents to US$6.70 1/2 and December corn was up 7 1/2 cents to US$6.85 1/4.

 

Weekend storms and forecasts for more rain in the U.S. corn belt fueled concern that total acres and yield would suffer, traders said.

 

Jerry Gidel, an analyst with North American Risk Management Services, said planting was likely minimal during the past week and that there could still be 3 million to 4 million acres left to plant. Analysts said much of that land will either be turned over to soybeans, or growers will decide not to plant and opt for insurance instead.

 

The USDA's crop progress report will be released Monday afternoon. The portion of the crop rated good or excellent could drop by about 5 percentage points, from 61% last week, traders said.

 

After rallying to record highs last week, traders were cautious ahead of the U.S. Department of Agriculture's supply and demand report, which will be released at 8:30 a.m. EDT Tuesday morning.

 

"You've come a long way, you've got a big report coming out tomorrow, and I think you had people taking money off the table," a trader said.

 

Corn contracts closed almost 10 cents lower than highs reached in morning trading. July corn did not challenge its all-time high of US$6.73, which had been set in overnight trading.

 

The market has already been factoring in reduced corn production, a trader said, and it would take a drop in projected yield below 152 bushels per acre for Tuesday's report to be seen as bullish. The USDA's projection last month was 153.9 bushels per acre.

 

Weaker crude oil and a stronger dollar limited gains, traders said, although the market remained weather-driven. DTN Meteorlogix forecasts more rain later this week, with up to 2 inches in the western corn belt Thursday and up to 1.5 inches in the east on Friday.

 

CBOT oats ended lower Monday on weak demand and a lack of bullish news, a trader said. July oats were down 5 1/4 cents to US$3.94 per bushel, September oats were down 5 1/4 cents to US$4.05 1/2 per bushel and December oats were down 5 cents to US$4.21.

 

Ethanol futures were higher. July ethanol was up US$0.007 to US$2.458 per gallon and December ethanol was up US$0.018 to US$2.508.