January 10, 2009
CBOT Corn Review on Friday: Rides soy, south American weather higher
A rising tide caused by soybeans lifted Chicago Board of Trade corn futures higher Friday, traders said.
March corn ended up 4 cents to US$4.10 3/4 per bushel, May corn ended up 4 cents to US$4.21 1/4 and July corn ended up 4 cents to US$4.31 1/2.
Soybeans climbed more than 45 cents on the day, giving corn and other agricultural commodities a boost. Weather forecasts calling for more dry weather in Argentina and parts of Brazil are supporting both corn and soybeans. The hot, dry weather is bad for a corn crop that is entering a critical pollination period in some areas.
But many analysts say there's little other fundamental support for corn, which has held firm above US$4 since rallying more than US$1 from its December lows.
"As far as fundamental news, the only thing that's positive is the deterioration of growing conditions in South America," says Joel Karlin, analyst for Western Milling. "Corn is caught, I think, between its own inherent bearish fundamentals and certainly support coming from the oilseeds," he said.
Demand remains weak in all sectors, analysts said. The trade is expecting a slight increase in ending stocks in Monday's U.S. Department of Agriculture supply and demand report due to the lackluster demand. The USDA will issue that report, along with production and quarterly stocks, on Monday at 8:30 a.m. EST.
Karlin said significant resistance lies at US$4.25, while analysts also see support at US$4. Technical buying has boosted corn recently, some analysts said.
Although demand is bearish, some analysts think the market will, at least, continue to hold firm, due to ideas that corn needs to "buy" acres versus soybeans headed into 2009. That task has gotten harder with soybeans' recent jump -- a trader said the corn-soybean spread has grown from US$4.70 to US$6.24 in less than a month.
CBOT oats futures ended higher on outside support. March oats ended up 7 cents to US$2.30 per bushel and May oats ended up 7 cents to US$2.39 1/2. A trader noted light commercial selling limiting the rally.
Ethanol futures ended higher. February ethanol ended up US$0.032 to US$1.685 per gallon and March ethanol ended up US$0.038 to US$1.692.