June 27, 2008

 

CBOT Corn Review on Thursday: Rallies on rainfall, outside support

 

 

Stormy U.S. corn belt weather and strong outside markets propelled Chicago Board of Trade corn futures Thursday.

 

July corn ended up 23 3/4 cents at US$7.53 3/4 per bushel, September corn closed up 23 3/4 cents at US$7.68 1/4 and December closed up 23 cents at US$7.88.

 

July corn tied the all-time high of US$7.60 for the nearby contract, while December, the most active month, set a new contract high of US$7.95. Corn prices briefly rose 30 cents, its exchange-imposed daily trading limit, before profit-taking began to trim gains, analysts said.

 

A rally in crude oil and gold, along with a weaker dollar, provided strong support to corn and other commodities, traders said. Outside markets, combined with heavy rains Thursday in parts of the corn belt, particularly Iowa, "made for an explosive commodities environment," a trader said.

 

Much of Iowa, the top corn-producing state, received heavy rains Thursday, sparking flash flood warnings, T-storm Weather said. The state has already been hammered by a wet spring that caused historic flooding earlier this month.

 

The weather was mostly seen as bullish, although some traders also said there are areas that could use the rain, as long as it's not excessive.

 

Crop concerns should continue to support the market Friday, ahead of Monday's planted acreage report from the U.S. Department of Agriculture, analysts said.

 

"I still think shorts will be on notice Friday," an analyst said. "Nobody wants to be caught off-guard."

 

The market ignored an export sales report that one trader called "terrible."

 

The report signals a possible slowing of demand due to rising prices, analysts said, and could eventually weigh on the market.

 

"We're probably going to have to come back to that later on," an analyst said.

 

CBOT oats were higher. July oats closed up 9 cents to US$4.35 1/2, September oats closed up 8 1/2 cents to US$4.48 1/2 and December oats closed up 8 1/2 cents to US$4.66 1/2.

 

Ethanol futures were higher. July ethanol was up US$0.058 to US$2.913 per gallon and December ethanol was up US$0.061 to US$2.89.