June 13, 2008

 

CBOT Corn Review on Thursday: Sets new highs before profit-taking surfaced

 

 

Chicago Board of Trade corn futures ended higher Thursday, setting new record highs on U.S. corn belt flooding and crop concerns, but profit-taking trimmed gains down the stretch, traders said.

 

July corn ended 5 3/4 cents higher at US$7.09, and December finished 6 3/4 cents higher at US$7.39 1/2.

 

The market set a new record for prices again as tight supply outlooks amid the idea that corn's preferred planting window has closed due to Midwest floods uncovered speculative fund buying again, analysts said.

 

July hit an all-time high of US$7.25 1/2 before prices retreated.

 

After establishing a new price record, futures settled midrange, leaving the recent upward trend intact, a trader said. "I think you ran into a profit-taking vacuum that effectively trimmed advances down the stretch," a trader said.

 

Nevertheless, futures remain supported by bullish fundamental outlooks, as several states have experienced flooding problems this week, and planted acreage is likely to drop, analysts said.

 

This scenario will tighten an already tight 2008-09 U.S. corn balance sheet.

 

Traders said that given the approaching weekend and how far prices have already climbed, upside momentum was limited once fund buying slowed.

 

Corn daily trading will revert back to its normal 30 cents Friday.

 

The DTN Meteorlogix Weather forecast said the 10-day outlook, through Sunday, June 22, indicates a chance of drier conditions over the eastern Midwest, due to a deepening upper-atmosphere trough over the region. This development has the potential to bring drier and cooler weather to the Corn Belt east of the Mississippi. Western areas remain in the target for more rain, due to warm air in the Plains clashing with the cool air over the eastern Midwest. In pit trades, buyers and sellers were scattered among various commission houses, with speculative fund selling estimated near 12,000 lots.

 

CBOT oats futures closed firmer. July oats rose 7 1/2 cents to US$4.20 1/2 per bushel, and September oats jumped 7 3/4 cents to US$4.47 3/4.

 

Ethanol futures were higher. July ethanol was up 7 cents at US$2.69 per gallon, and December ethanol was up 8 cents at US$2.71.