December 11, 2009

 

CBOT Corn Review on Thursday: Ends up on technical support, crop concerns

 

 

Technical buying and concerns about how this week's Midwestern snowstorm might affect the U.S. crop sent Chicago Board of Trade corn futures higher Thursday.

 

December corn ended up 9 1/4 cents to US$3.77 1/4 per bushel, and March corn ended up 9 1/2 cents to US$3.93.

 

The market held support at the bottom end of its recent trading range early in the session and took off higher in a surge of technical momentum, traders said.

 

Some traders said that fundamentally nothing has changed in the market, particularly after the U.S. Department of Agriculture issued a supply and demand report Thursday that increased projected ending stocks and lowered projected exports by 50 million bushels, as expected.

 

But other traders and analysts say that the snowstorm that dumped more than a foot of snow in much of the corn belt was supportive, and will result in crop losses.

 

"The big deal was we've got probably, it depends on who you talk to, upwards of 700 to 800 million bushels of corn in a major snowbank," said Don Roose, president of U.S. Commodities in West Des Moines, Iowa.

 

On top of that, analysts estimate that roughly 1.5 million bushels of corn total remain unharvested.

 

"When you have a majority of your corn carryout in the field, that makes you nervous," Roose said.

 

Sid Love, analyst for Kropf and Love Consulting, said that historically there is not much reason to worry. He said he recently was researching the matter and found that in 1973, a year in which 30% of the crop was still in the field in December and 10% remained in January, the U.S. still managed to produce a record crop.

 

Market bears add that demand is too poor to sustain a strong rally in corn.

 

Funds flocked to the market Thursday, buying an estimated 11,000 contracts. The market climbed despite weakness in crude oil.

 

CBOT oats futures ended slightly higher. December oats ended up 1 1/2 cents to US$2.46 per bushel and March oats ended up 1 1/2 cents to US$2.56.

 

Ethanol futures were lower. January ethanol ended down US$0.018 to US$1.927 per gallon and March ethanol ended down US$0.016 to US$1.832.