June 24, 2008

 

CBOT Corn Review on Monday: Higher on support from end-users, crude

 

 

Chicago Board of Trade corn futures ended higher Monday as end-user buying and support from crude oil outweighed dry weather, analysts said.

 

July corn was up 3 cents to US$7.24 1/4 per bushel, September corn was up 3 1/4 cents to US$7.38 3/4 and December corn was up 3 3/4 to US$7.59 1/4.

 

The market posted gains in the afternoon, but traders said there was little fundamental news to support the rally.

 

Crude oil prices, which climbed on Nigerian supply problems, were supportive, a trader said. Prices had been more than 15 cents lower in early trading.

 

Recent dips in the market are attracting end-users, who are buying futures and limiting market losses, an analyst said.

 

"There definitely seems to be some people who want to buy a break from the end-user standpoint," said Kent Beadle, an analyst with Country Hedging.

 

But another analyst said "longs are using rallies to get to the sidelines," and traders said some are questioning whether corn reached a top during its recent record-breaking rally.

 

Weather was bearish, traders said, as last week's dry weather should be followed by more clear skies for much of this week, according to forecasts. Climbing temperatures should help flooded areas dry out, a trader added.

 

The USDA's crop progress report to be released at 4 p.m. EDT is expected to show the portion of the crop rated good or excellent to rise two or three percentage points, from 57% last week. But traders caution there is a lot of uncertainty in their estimates this week due to flooding in the U.S. corn belt.

 

The trade is awaiting the June 30 acreage report from the U.S. Department of Agriculture, although analysts disagree on the importance of the numbers. Some say it will be the first good indicator of how big a hit farmers will take due to the flooding, but others say the USDA will be unable to gauge the full extent of the damage until its next report. The USDA has announced it will do additional surveying due to the flooding and issue another report in August.

 

CBOT oats futures were higher. A trader said oats were supported by corn's late rally. July oats closed up 4 cents to US$4.19 1/2 per bushel, September oats ended up 4 cents to US$4.32, and December oats closed up 4 1/4 cents to US$4.49 1/2.

 

Ethanol futures were lower. July ethanol was down US$0.017 to US$2.851 per gallon, and December was down US$0.042 to US$2.835.