June 25, 2009

 

CBOT Corn Review on Wednesday: Lower on crop weather, outside pressure

 

 

Chicago Board of Trade futures ended slightly lower Wednesday as outside market pressure and continued good crop weather weighed on the market.

 

July corn ended down 2 1/2 cents to US$3.86 1/2 per bushel, September corn ended down 2 1/4 cents to US$3.95, and December corn ended down 1 3/4 cents to US$4.07 1/4.

 

A stronger dollar and weaker crude oil weighed on prices. Despite corn's losses, the market held above its Monday low of US$3.80 1/2 in the July contract, falling as low as US$3.81 1/4 before bouncing. The market could move sideways amid continued consolidation ahead of the June 30 acreage and grain stocks report, analysts said.

 

But the market seems unlikely to rally unless the weather turns bad for the crop, they said.

 

"The best way I can term it is that the markets are heavy right now," says Jason Britt, president of Central State Commodities.

 

He said the market is stuck with good crop condition ratings and "fairly good growing conditions." This week's hot weather is not considered a threat at this stage in the growing season, particularly because it isn't expected to be sustained and because it is accompanied by ample rainfall.

 

Analysts added that there has been a little more talk in recent days about the possibility that corn acreage will remain steady or even increase in the June 30 acreage report from the U.S. Department of Agriculture. An increase would be bearish. The trade mostly expects acreage to drop, however, because of a wet spring that prevented some planting.

 

Technically, the market remains under pressure, traders said.

 

"I think in corn you're disappointed because it couldn't bounce more the past couple days," a trader said.

 

Funds sold an estimated 5,000 contracts Wednesday.

 

Looking ahead to Thursday, the USDA will release weekly export sales estimates at 8:30 a.m. EDT. Analysts are expecting sales between 600,000 and 1 million metric tonnes, down from 1.143 million the prior week.

 

CBOT oats futures ended lower. July oats ended down 2 cents to US$2.06 per bushel, and December oats ended down 2 1/2 cents to US$2.28 1/2.

 

Ethanol futures were lower. July ethanol ended down US$0.010 to US$1.677 per gallon, and September ethanol closed down US$0.021 to US$1.634.