September 12, 2009

 

CBOT Corn Review on Friday: Climbs on wheat, ends higher for week

 

 

Chicago Board of Trade corn futures ended higher as the market brushed aside early weakness and surged late.

 

September corn ended up 5 cents to US$3.14 1/2 per bushel, and December corn ended up 4 1/2 cents to US$3.19 3/4.

 

Analysts said the rally appeared to be led by wheat and had no apparent fundamental reason. A floor trader added that there was buying of corn and selling of soy during the session.

 

Buyers were also encouraged that the market continued to hold recent lows, traders said. The December contract gained 13 1/2 cents on the week.

 

But Joel Karlin, analyst for Western Milling, said there is little for bulls to be excited about. Weather remains bearish, with no frost in the extended forecast.

 

"It appears the window for inflicting serious damage on this crop is starting to close," Karlin said.

 

The U.S. Department of Agriculture's supply and demand report was seen as mildly friendly, as it increased 2009-10 ending stocks less than the trade was expecting. But Karlin and others dismissed the estimate, saying it was based on an optimistic demand outlook, particularly for feed.

 

The USDA increased the 2009 projected crop yield to 161.9 bushels per acre, up from 159.5 bushels in August. This was within trade expectations, but analysts expect the yield to climb.

 

"We're just getting started here as far as I'm concerned," Karlin said.

 

But despite the bearish sentiment, some traders and analysts say the market's bottom won't come until later in the year.

 

"We don't usually make lows in September," a trader said.

 

Karlin said the market could be bottoming around Thanksgiving. He expects the ending stocks to eventually climb above 2 billion bushels, and for corn prices to dip below US$3.

 

CBOT oats futures ended slightly higher. September oats ended up 3/4 cent to US$1.96 per bushel and December oats ended up 3/4 cent to US$2.08.

 

Ethanol futures were mixed. October ethanol ended up US$0.002 to US$1.594 per gallon and November ethanol ended down US$0.001 to US$1.576.