September 27, 2010

US corn prices rebound on bullish market

US corn prices climbed sharply Friday (Sep 24), rebounding from a corrective tone that lasted all week to establish a new high close for the bull market.

December CBOT corn ended up 22 1/2 cents, or 4.5%, to US$5.21 3/4 a bushel and March corn closed up 22 cents to US$5.34 1/4.

Prices are at their highest levels in two years and set new highs on the rally, although traders said that bulls have more work to do to extend the technical uptrend.

Analysts said that disappointing US yields continue to fuel the market. One analyst said that while yields have improved somewhat as the harvest has moved north and west, that has not been enough to offset disappointing crops in the eastern Corn Belt.

Meanwhile, the harvest has been delayed in the northwest Corn Belt, and several inches of rain in south-central Minnesota--considered a "garden spot" this year with excellent-looking crops--has likely caused some damage to corn, analysts added.

Traders and analysts are largely expecting a crop yield of around 160 bushels an acre, down from last year's record of 164.7 bushels. However, many traders said that fundamentals are taking a back seat.

Meanwhile, a surging soy market added to the bullish tone Friday, and funds bought an estimated 18,000 contracts. A weaker dollar and surging equities set the stage for a bullish day for commodities generally.