June 27, 2009

 

CBOT Corn Review on Friday: Posts light gains; waits for USDA report

 

 

Chicago Board of Trade corn futures closed modestly higher Friday with traders reluctant to make moves before next week's acreage and grain stocks reports.

 

July corn closed up 1 3/4 cents at US$3.84 1/4 per bushel, trimmed from the intraday high of US$3.86, and December closed up 2 3/4 cents at US$4.04 1/4.

 

The market traded both sides in early activity and touched intraday highs in late trading, remaining slightly higher through the close.

 

Analysts and traders said Friday's action was spurred mostly by positioning, as the trade heads into the weekend and end of the month, as well as prepares for the U.S. Department of Agriculture's crop acreage and grain stocks reports at 8:30 a.m. EDT Tuesday. Commodity funds bought an estimated 4,000 contracts.

 

A Dow Jones Newswires survey of analysts showed expectations on average for the USDA to lower its acreage forecast to 84.158 million acres from its March estimate of 84.986. Analysts expect grain stocks to be slightly higher than they were a year ago, according to a Dow Jones Newswires survey. The acreage report is particularly anticipated and could set the market's direction through the rest of the summer, analysts said.

 

Traders and analysts are evaluating likely acreage and are reluctant to make any moves before its release, analysts said.

 

Sid Love, an analyst with Kropf and Love, said traders and analysts are citing a wide range of USDA acreage and grain stocks estimates. "I think that causes people to swim to the shore and hang out there," he said, adding that the market will see action after the information is released.

 

Jerry Gidel, analyst with North America Risk Management Services, said he didn't think the survey showed as severe a decline in corn acreage as people thought earlier. He said "there isn't a lot of excitement going on" as the trade awaits the report.

 

Traders may also be eyeing the USDA quarterly hog and pig report released Friday afternoon for clues into feed demand, an analyst said.

 

Crop weather is still looking favorable and bearish, traders and analysts said. Cooler weather beginning in western areas of the corn belt will likely set in Saturday, with the entire corn belt cooler on Sunday, a T-storm Weather forecast said. Some thunderstorms are forecasted to occur Saturday, with warmer weather gradually returning by late next week, the forecast said.

 

A move below US$3.96 per bushel basis December could indicate a break down to US$3.82 or lower, while a push above US$4.07 1/4 could generate follow-through buying to push prices to US$4.27 1/2 or higher, said a Fortis market commentary.

 

CBOT oats ended higher. July oats were up 6 1/4 cents at US$2.09 1/4 per bushel, and September also closed up 6 1/4 cents at US$2.128 3/4.

 

Ethanol futures ended mostly higher. July ethanol closed up US$0.009 at US$1.678 per gallon, and December was unchanged at US$1.640.