March 17, 2010

 

CBOT Corn Review on Tuesday: Ends higher on crude gains, planting concerns

 

 

Higher crude oil prices and underlying concerns about spring planting helped send Chicago Board of Trade corn futures higher Tuesday.

 

May corn ended up 3 1/2 cents at US$3.66 3/4 a bushel, and July corn closed up 3 1/2 cents at US$3.77 3/4.

 

A weaker dollar along with higher crude prices set the tonnee, analysts said. Most commodities climbed, including soy, which ended more than a dime higher.

 

Prices also were supported by wet conditions in the Midwest, which were underscored by a warning from the National Oceanic Atmospheric Administration that the upper Midwest could face historic flooding this spring. The agency said flooding in the Red River valley could match last year's high waters, and could be more widespread. The high risk for flooding extends into Iowa as well.

 

Some traders said that it is still early to be pushing the market too high on planting concerns, and noted that weather forecasts for the Midwest through the end of March have been mixed.

 

The market continues to trade in a tight range, with strong technical support underneath the market at US$3.59 in the May contract. Prices could move sharply in either direction once they break out of the range, analysts said.

 

"I think whenever we break out we could move 30 cents in a hurry," said Chad Henderson, an analyst with Prime Ag Consultants

 

Funds bought an estimated 5,000 contracts on the day.

 

Despite the bleak outlook for the northern plains, flooding of the Red River in eastern North Dakota, expected later this week, shouldn't affect corn planting because seeding won't start until late April or May, according to Tom Lilja, executive director of the North Dakota Corn Growers Association.

 

The river is projected to crest about 20 feet above flood stage and three feet below last year's record crest by Saturday.

 

CBOT oats futures ended mostly higher. May oats closed up 2 cents at US$2.18 a bushel and July oats settled up 1 3/4 cents at US$2.26 1/2.

 

Ethanol futures were slightly higher. April ethanol was up US$0.005 at US$1.544 a gallon and May ethanol settled up US$0.007 at US$1.561.