June 28, 2008


CBOT Corn Review on Friday: Mixed; consolidation ahead of report



In a choppy day of trading, Chicago Board of Trade corn futures ended mixed Friday as traders displayed caution ahead of Monday's government planted acreage report.


July corn was up 1 cent to US$7.54 1/2 per bushel, September corn was down 1/2 cent to US$7.67 3/4 and December corn was down 1 cent to US$7.87.


The market traded both sides throughout the day, as momentum from crop concerns and outside markets, which fueled a rally earlier in the week, faded.


The U.S. Department of Agriculture will report planted acreage and third- quarter stocks Monday at 8:30 a.m. EDT. The report could spark significant price action, particularly if it forecasts a significant reduction in acreage, an analyst said.


"We're having a little bit of consolidation after this week's big movement, and ahead of what will probably be some big movement at the start of next week," said Brian Hoops, president of Midwest Market Solutions.


Analysts project the USDA will drop acreage to an average of 85.321 million acres from 86.014 million acres in its March report. The drop would have been greater, analysts said, but high corn prices had prompted some growers to increase their acreage after the March report.


Although the market has been anticipating the report for weeks, some analysts said it would be unreliable because the USDA will not be able to accurately gauge the flood's effects.


Concern about government intervention into the commodities markets is weighing on prices, traders said.


"A degree of caution is coming into the commodities markets, as people worry about Congress saying, 'CFTC, do something,'" a trader said.


On Thursday, the U.S. House of Representatives voted overwhelmingly to order the Commodity Futures Trading Commission to use its emergency powers to immediately curb excessive energy market speculation. Gains in crude oil prices have supported other commodities markets, including corn, for much of this year.


Crop concerns remain supportive, traders said, although Hoops said this week's heavy rains in parts of the U.S. corn belt have been factored into the market.


CBOT oats futures ended lower. July oats were down 3 1/2 cents to US$4.32 per bushel, September oats were down 2 3/4 cents to US$4.45 3/4, and December oats were down 2 1/4 cents to US$4.64 1/4. Traders were cautious ahead of Monday's planted acreage report, a trader said.


Ethanol futures were slightly higher. July ethanol ended up US$0.018 to US$2.917 per gallon, and December oats closed up US$0.039 to US$2.919.


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