June 26, 2008

 

CBOT Corn Review on Wednesday: Sharp climb on weather, outside support

 

 

The return of rainy weather to the U.S. corn belt and outside support sent Chicago Board of Trade corn futures higher Wednesday, analysts said.

 

July corn was up 17 1/2 cents to US$7.30 per bushel, September corn was up 17 1/2 cents to US$7.44 1/2 and December corn was up 17 1/2 cents to US$7.65.

 

Forecasts calling for showers and thunderstorms across the corn belt through Saturday are raising more concerns about a crop that has already suffered from a cool, wet spring and historic flooding earlier this month. Much of northern Missouri saw heavy rains Tuesday night, with totals as high as 7 inches.

 

"The rains certainly did send a wakeup call that we're not out of the woods yet," said Arlan Suderman, an analyst with Farm Futures.

 

Traders say rainfall, as long as it is not excessive, is not necessarily bullish, since it could benefit some areas that haven't seen flooding.

 

Prices were about 10 cents higher for much of the day, and surged late on outside support, an analyst said.

 

"That was soybean and soybean-meal-inspired short covering," the analyst said.

 

A trader agreed there was outside support Wednesday, but said it came from wheat rather than soybeans. Grains and soybeans climbed despite a break in crude oil prices, traders noted.

 

The market is looking ahead to Monday's acreage report from the U.S. Department of Agriculture. Analysts say it will offer an initial glimpse at how much the crop has been damaged by flooding this month. But they add many traders will disregard the report.

 

The USDA has acknowledged the difficulty in assessing the damage for Monday's report. It is conducting additional surveying this week and will issue another report in August to fully reflect the flood's effect.

 

"Nobody's going to know anything until the August crop report," a trader said. "This crop is going to be all over the place."

 

CBOT oats closed higher. July oats ended up 6 1/2 cents to US$4.26 1/4 per bushel, September oats closed up 7 1/2 cents to US$4.40 and December oats closed up 7 1/2 cents to US$4.58.

 

Ethanol futures were slightly higher. July ethanol was up US$0.009 to US$2.849 per gallon, and December ethanol was up US$0.028 to US$2.829.