August 20, 2009
CBOT Corn Review on Wednesday: Gains on short covering, bullish outside markets
Corn futures at the Chicago Board of Trade closed modestly higher and nearer the session high Wednesday. Short covering following recent losses and bullish outside market influences lent modest support to the corn market, said a Midwest analyst.
December corn closed up 5 1/4 cents a bushel at US$3.27 3/4. September corn closed up 6 cents at US$3.20 1/2.
"Unexpected strength in the outside markets brought short covering to the grain markets," the analyst said. The U.S. dollar reversed early gains to trade lower, while crude oil was sharply higher on lower-than-expected weekly stocks data. The U.S. stock indexes also traded higher after a weaker start.
"Weather in the Corn Belt continues to be non-threatening," said Don Roose, veteran market analyst with U.S. Commodities in Des Moines. He said any gains in corn futures will be limited by the bearishly construed Midwest weather. Scattered rainfall chances and no extreme heat in the forecast for the U.S. midsection continue to suggest the corn crop will continue to mature with no problems.
However, Freese-Notis weather pointed out in a report that "crop progress and crop condition numbers released Monday afternoon confirmed what the markets already knew: we have some nice-looking corn and soy crops this year, but it is going to be a race to get them all to maturity before we see our first fall frost."
Roose said the recent weakness in the Chinese stock and commodities markets is spilling over into selling pressure in the U.S. grain futures markets. China's commodity futures took a tumble overnight, led by plummeting steel prices.
The Pro Farmer Midwest Crop Tour continues to garner trader interest. There have been no big surprises coming from the tour, the Midwest analyst said. The corn crop has very good yield potential, crop scouts have determined. Final Tour results from Illinois will be released Wednesday evening.
September grain futures options expire at the close on Friday, Aug. 21.
