November 11, 2008
CBOT Corn Review on Monday: Climbs on USDA report; range-bound
A government cut in projected corn production and a late surge in crude oil pushed Chicago Board of Trade corn futures higher Monday, traders said.
December corn ended up 8 cents to US$3.83 1/2 per bushel and March corn ended up 8 cents to US$4.01 1/2.
The U.S. Department of Agriculture's crop production report, which cut total production and yield, was slightly bullish, traders said. Technically, buyers were encouraged by the fact that the market has failed to break below last month's low of US$3.64 in the December contract, analysts said.
"I think now through the end of the year, we could be kind of range-bound," said Western Milling analyst Joel Karlin.
Corn should continue to trade within a range, a trader said, "as long as all hell doesn't break loose in the outside markets."
A trader said there was some unwinding of corn-soybean spreads early in the day, as the USDA also issued slightly bearish soybean estimates to go along with the bullish corn projection.
Corn is weaker fundamentally than soybeans at the moment, Karlin said. Any charge to the upside would likely be led by soybeans; any significant drop would likely be led by corn, Karlin said.
Weak demand continues to weigh on the market, analysts said. One analyst said the weak demand was reaffirmed by USDA weekly grain export inspections of 24.75 million bushels. For the year, inspections are at 301.2 million bushels, down from 468.1 million bushels at the same time last year.
Prices had been more than 10 cents higher in early trade before retreating, as a rally in outside markets following China's announcement of a stimulus package faded.
"That was worth the first couple hours of trade, that's about it," a trader said of China's announcement.
But the market surged again later in the day on a bounce in crude oil, traders said.
The market was also supported by the weather, an analyst said, with rainfall expected in the U.S. corn belt during this week that could delay harvest work.
CBOT oats ended higher. December oats ended up 1 1/2 cents to US$2.36 per bushel and March oats ended up 1 1/4 cents to US$2.51 1/2.
Ethanol futures also climbed Monday. December ethanol was up US$0.015 to US$1.737 per gallon and January ethanol ended up US$0.019 to US$1.739.