October 30, 2009

 

CBOT Corn Review on Thursday: Rebounds on weak dollar, midwest rains

 

 

Chicago Board of Trade corn futures ended higher Thursday, rebounding from recent losses thanks to a weaker dollar and soggy weather in the U.S. Midwest.

 

December corn ended down 10 1/2 cents to US$3.79 1/2 per bushel and March corn ended down 11 cents to US$3.92 1/2.

 

Outside markets set the tonnee, boosting most commodities for the day.

 

"I think the biggest thing was the sharply lower U.S. dollar," said Brian Hoops, president of Midwest Market Solutions.

 

That helped boost crude oil, also supportive to corn, and a surge in equities added to corn's strength.

 

After losing almost 30 cents this week, a bounce was not a big surprise.

 

"I just think the bottom line is we've had a rough week in here, we might as well bounce back a bit," said Chad Henderson, analyst with Prime Ag Consultants.

 

Traders also noted heavy rains and winds hitting the corn belt through Friday. Harvest is already well behind schedule, and there are concerns about low test weights that could weigh on the crop's final yield.

 

At the same time, weather forecasts for next week continue to call for dry weather, which should give fields a chance to dry and farmers the opportunity to get their combines rolling. The market should see more pressure once harvest picks up, analysts say, although an abundance of wet corn and limited drying capacity could continue to slow progress.

 

If the dollar firms up next week, that and improved harvest progress could again weigh on prices.

 

Hoops said that for now the market seems to be ignoring poor exports, which were reaffirmed by low weekly export sales reported Thursday. The trade would eventually have to recognize poor export demand if it continues, Hoops said.

 

Funds bought an estimated 7,000 contracts.

 

CBOT oats futures ended higher. December oats ended up 9 1/2 cents to US$2.57 1/4 per bushel and March oats ended up 9 3/4 cents to US$2.71.

 

Ethanol futures were mostly higher. November ethanol was flat at US$1.955 per gallon and December ethanol ended up US$0.015 to US$1.881.