September 9, 2008

 

CBOT Corn Review on Monday: Slight climb in technical rebound; little news

 

 

Chicago Board of Trade corn futures crept slightly higher Monday as the market rebounded from last week's losses, but the market showed few signs of being able to sustain a rally, traders said.

 

September corn ended up 1 1/2 cents to US$5.33 per bushel, December corn ended up 1/2 cent to US$5.49 and March corn ended up 1/2 cent to US$5.67 3/4.

 

Traders and analysts said the market's gains were due to sentiment that the market was oversold after losses last week in corn and soybeans.

 

"The markets are maybe getting a little short term tapped out," a trader said.

 

Sid Love, analyst for Kropf & Love Consulting, said corn is taking its direction from outside markets amid a lack of fundamental news. The dollar was stronger Monday, but crude oil was lower for much of the day and ended virtually flat.

 

Traders might be cautious all week ahead of the U.S. Department of Agriculture's crop-production report, scheduled to be released Friday morning, traders said. Most traders and analysts expect the USDA will reduce its production and yield estimates.

 

"I keep hearing that we didn't fill the ears, and cool weather probably set things back a little bit," Love said.

 

Love said there is considerable uncertainty about the crop that will not be resolved with the September report. Another analyst said the trade won't have a clear picture "until the combines roll into the fields."

 

With corn under strong pressure amid widespread commodity liquidation in recent weeks, the market is unlikely to rally without bullish supply news, a trader said.

 

"It will be tough sledding for bulls if the USDA comes out with only nominal declines in yields," the traders said.

 

Weather, which was a bearish influence last week because of rainfall across the U.S. corn belt, offered support Monday, a trader said, as forecasts introduced the possibility of a frost in the long-range weather forecast. However, the trader noted that the threat is still far away and could easily dissipate.

 

An early frost would be especially damaging to the crop this year because it was planted late and needs more time to mature, analysts said. Agronomists say development continued to lag during a cool August.

 

Trade estimates for Monday afternoon's crop-production report vary. Some see a decline of as much as 2% in the crop rated good to excellent, but others, noting corn-belt rainfall during the past week, expect a slight improvement of a single percentage point.

 

CBOT oat futures inched higher in what a trader said was "the slowest day we've had in a while." September oats ended up 2 cents to US$3.29 per bushel, December oats ended up 1 cent to US$3.42 and March oats ended up 1 cent to US$3.59 1/2.

 

Ethanol futures ended slightly higher. December ethanol ended up US$0.003 to US$2.164 per gallon and January ethanol ended up US$0.005 to US$2.163.