August 19, 2009
CBOT Corn Review on Tuesday: Near steady; bullish outsides, bearish fundamentals
Corn futures at the Chicago Board of Trade closed near steady and near mid-range in quieter trading Tuesday.
December corn futures closed up 3/4 cent at US$3.22 1/2. September corn closed up 1/2 cent at US$3.14 3/4.
Beneficial late-season growing weather in the U.S. Corn Belt and early results from the Pro Farmer crop tour showing big yield potential for the U.S. corn crop did limit buying interest Tuesday, said Victor Lespinasse, veteran market analyst with grainanalyst.com.
"Weather is the bearish main ingredient" in the corn futures market, said Lespinasse. Weather in the U.S. Corn Belt remains benign for the U.S. row crops. However, Lespinasse added that "we need an extended growing season" because a significant portion of the corn crop is behind the normal maturity pace.
Traders are keeping a close eye on the weather, as widespread rains are in the forecast for the bulk of the Midwest into Friday. While traders note crop conditions are good, they are becoming increasingly concerned about the need for a longer growing season to maximize corn yield potential. However, traders are not yet willing to add in weather premium yet as crops are getting through their grain-fill stage without extended stress, said a Midwest-based analyst.
The latest weekly USDA Crop Progress reports, issued late Monday, showed the U.S. corn crop conditions unchanged from the prior week. The report showed 19% of the U.S. crop in excellent condition, 49% in good condition, 22% in fair condition and 10% in poor to very poor condition.
The key "outside markets" were in a bullish posture for the corn futures market most of the day Tuesday. Crude oil futures and the U.S. stock indexes were higher, while the U.S. dollar index was weaker. That did limit selling pressure in corn, said Lespinasse.
The Pro Farmer crop tour shows "very strong potential for big corn yields," said Lespinasse. Tuesday, the Pro Farmer tour is taking samples from Indiana, Illinois and Nebraska.
