July 28, 2009

 

CBOT Corn Review on Monday: Higher amid short-covering, strong exports

 

 

Chicago Board of Trade corn futures ended higher Monday amid short-covering in light-volume trade, traders said.

 

September corn ended up 6 cents to US$3.22 1/4 per bushel, and December corn ended up 6 1/2 cents to US$3.33 3/4.

 

The market rebounded after Friday's slide, which sent the market to its seventh straight lower weekly close and was considered a bearish sign by many traders. Dave Marshall, an independent commodity broker and adviser in Nashville, Ill., noted that funds have moved to a considerable net short position the past couple weeks.

 

"I guess it's not all that surprising that they might be evening up some of these positions ahead of the August report," he said. The U.S. Department of Agriculture will issue an updated crop production report Aug. 10, including revised acreage numbers.

 

The market closed near the day's highs, and the September contract closed just above its 10-day moving average. Funds bought an estimated 6,000 contracts Monday.

 

Strong export inspections helped boost the market, analysts said. The U.S. Department of Agriculture reported corn inspections for export at 52.234 million bushels, well above last week's total of 39.366 million and higher than trade expectations of 30 million to 35 million. Traders say the market has found strong export demand on its recent slide toward US$3.

 

Recent rallies have mostly been attributed to short-covering and have been short-lived. Weather remains the key bearish influence.

 

Traders and analysts note only minor potential problems for the U.S. crop. Some areas of the western Corn Belt are dry. Also, weather forecasts extending out two weeks show some potential for greater heat in the Corn Belt. But those threats are overshadowed by the moderate temperatures and ample rainfall prevalent in the Midwest, traders and analysts say.

 

Traders are mostly expecting a modest drop of one to two percentage points in the portion of the crop rated good to excellent in Monday's crop progress report, which will be released at 4 p.m. EDT.

 

CBOT oats futures ended mostly higher. September oats ended flat at US$1.95 per bushel, and December oats ended up a 1/2 cent to US$2.07 1/2.

 

Ethanol futures were higher. August ethanol ended up US$0.030 to US$1.595 per gallon, and September ethanol ended up US$0.044 to US$1.550.