December 19, 2009

 

CBOT Corn Review on Friday: Up slightly amid mixed outside markets

 

 

Chicago Board of Trade corn futures inched slightly higher Friday as the market got caught between a surge in wheat and a slump in soy.

 

March corn ended up 3/4 cent to US$3.97 3/4 and lost 6 3/4 cents on the week. May corn ended up 3/4 cent to US$4.08 1/2.

 

The market traded both sides during the session, and traders said the choppy trade could continue through the rest of the month as volumes are light.

 

Wheat was almost 10 cents higher during the session while soy dropped more than a dime. Both markets have implications for corn--weak wheat prices make it a stronger competitor for feed usage, and stronger soy prices could sway farmers deciding whether to plant corn or soy in their fields.

 

Outside macro markets were also mixed. The dollar strengthened during the session, but gains in crude oil kept the corn market from retreating, traders said.

 

Funds bought an estimated 2,000 contracts.

 

Technically the market has avoided major damage despite recent losses, and it is hovering around key major moving averages. But bulls want to push it back above US$4 soon, an analyst said.

 

Although much of the focus has shifted to demand and South America production, the U.S. crop remains an issue.

 

The late season corn harvest is slowly advancing in areas that are not too wet or snow-packed, as producers get as much fieldwork done as they can in advance of a winter storm next week, merchandisers said.

 

"They are gradually harvesting the crop, but there is a storm system on tap for next week," said Don Roose, analyst and president of U.S. Commodities in Des Moines, Iowa.

 

The corn harvest was 92% complete as of Sunday, the U.S. Department of Agriculture said.

 

The late harvest will keep the crop picture unclear into the new year, analysts say.

 

"I think that uncertainty is going to create a little bit of a bid going forward," said Jason Britt, president of Central State Commodities.

 

In other news, private analytical firm Informa Economics lowered its projection Friday for the size of the 2009 corn crop but raised its soy crop estimate, traders said.

 

Informa pegged the corn crop at 12.97 billion bushels, up 47 million from the USDA's November forecast but down from the firm's November estimate of 13.64 billion.

 

Meanwhile, the firm is expecting corn acreage to increase in 2010 while soy acreage falls slightly.

 

Informa projects 2010 corn planted acres at 89.5 million, up from the USDA's estimate of 86.4 million in 2009.

 

CBOT oats futures ended higher Friday. March oats ended up 1 1/4 cents to US$2.60 1/4 per bushel and May oats ended up 1 1/4 cents to US$2.68 1/2.

 

Ethanol futures were virtually unchanged. January ethanol ended down US$0.001 to US$1.835 per gallon and March ethanol ended up US$0.004 to US$1.812.