August 27, 2009

 

CBOT Corn Review on Wednesday: Down slightly as trade eyes weather

 

 

Chicago Board of Trade corn futures ended slightly lower Wednesday, as the market was caught between expectations of a large crop and fears that an early frost could prevent yields from reaching their full potential.

 

September corn ended down 1 cent to US$3.20 1/2 per bushel and December corn ended down 1/2 cent to US$3.26 1/4.

 

The market traded in a very tight range of about 5 cents, on either side of unchanged.

 

"I think we're just marking time here," said Joel Karlin, analyst with Western Milling.

 

While there is no frost in the forecast, cool weather expected in the Midwest in the next several days will continue to stymie the crop's development, analysts noted. This slow pace leaves the crop vulnerable to an early frost, they said, which is why the market is limiting losses and maintaining a weather premium.

 

As September progresses, the market will erode with each day there is no frost threat in the forecast, Karlin said.

 

T-storm Weather said Wednesday there appears to be no frost threat in main corn-producing areas through Sept. 11.

 

Funds sold an estimated 2,000 contracts Wednesday.

 

Farmers are tightly holding onto supplies, supporting cash prices, but some traders say that won't last much longer, especially if a frost threat doesn't materialize.

 

"My feeling is farmers still retaining some old crop corn will have to move it," Karlin said.

 

A floor trader said one wildcard over the next couple days is the conclusion of the month. "Month-ends have been bringing money into the markets," a trader said, although he said that doesn't mean the same thing will happen in August.

 

Traders expect strong weekly export sales to be reported Thursday morning, but say that demand for feed is weak and ethanol demand is questionable.

 

CBOT oats futures ended slightly higher. September oats were up 1/4 cent to US$2.15 3/4 per bushel and December oats were up 1/4 cent to US$2.29 3/4.

 

Ethanol futures were slightly lower. September ethanol was down US$0.006 to US$1.617 per gallon and December ethanol was down US$0.004 to US$1.595.