July 8, 2010

CBOT corn futures rise on declining crop ratings

Spillover support from wheat and equities, and declining crop ratings pushed US corn futures higher on Wednesday (July 7).

July corn ended up 10-¾ cents to US$3.70-¾ per bushel, and December corn ended up 10 cents to US$3.89-¼.

Tuesday's (July 6) lower-than-expected good-to-excellent crop rating in the USDA's crop progress report helped set the table, analysts said. Wheat and soy prices surged, as did equities, adding to the support. Corn prices were higher throughout the day and closed near session highs.

Chad Henderson, an analyst with Prime Ag Consultants, said that the corn market faces overhead technical resistance but said that its fundamentals are bullish and that the market should not be relegated to following wheat and soy.

"I think the weak players are the shorts in the corn market," he said. "It's time to chase them out."

There are lingering concerns about the wet June and resulting nitrogen loss that could hurt yields, traders said. That has capped yield expectations and damped talk of yields approaching 170 bushels per acre.

Others say that excessive heat could still be a problem.

Still, some traders note that chances are still good for a large, possibly record crop.

Traders are looking ahead to Friday's (July 9) supply and demand report from the USDA, with most expecting a significant cut in projected old crop and new crop ending stocks, in line with the USDA's bullish report last week. The USDA on June 30 projected lower acreage than most traders were expecting.