September 15, 2009

 

CBOT Corn Review on Monday: Ends lower; warm weather weighs

 

 

Chicago Board of Trade corn futures ended lower Monday under pressure from weather forecasts that remain mostly bearish.

 

September corn expired down 9 1/2 cents, at US$3.05 per bushel. December corn ended down 2 cents to US$3.17 3/4 and March corn ended down 1 3/4 cents to US$3.31 1.4.

 

Warm weather in the U.S. corn belt this week is good for the crop, which the trade is expecting to be huge, at around 13 billion bushels.

 

One analyst said that early yield reports from some southern states have been "off the charts," and another said that corn yields in excess of 200 bushels per acre have come in as for north as St. Joseph, Mo.

 

However, forecasts indicating some frost potential at the end of next week and again at the end of the month are keeping the market from pushing much lower, traders said.

 

"If you get a good hard frost then, then you've got some issues," a trader said.

 

He added that December corn "held where it had to" as the September contract fell before expiration. Funds sold an estimated 3,000 contracts.

 

The market has been stuck between US$3 and US$3.20 in the December contract so far this month.

 

"We're still trying to determine just how large this crop size is going to be," said Dave Marshall, an independent broker and advisor in Nashville, Ill.

 

Analysts also noted solid export demand, highlighted by Mexico's announced purchase of 400,000 metric tonnes U.S. corn Monday morning. That demand could persist if corn stays near US$3, some analysts say.

 

"The bears can take the attitude of 'prove it to me.' And the bulls still have something to kind of hang their hat on, in terms of usage," Marshall said.

 

Traders and analysts took note of the trade dispute that heightened over the weekend between the U.S. and China. Most said that it is bearish for the market if it persists long-term, but shouldn't have any immediate impact on the grain and oilseeds markets.

 

CBOT oats futures ended lower. September oats ended down 2 cents to US$1.94 per bushel, December oats ended down 2 1/2 cents to US$2.05 1/2, and March oats ended down 2 1/2 cents to US$2.18 1/2.

 

Ethanol futures were higher. October ethanol ended up US$0.016 to US$1.610 per gallon and November ethanol ended up US$0.013 to US$1.589.