September 25, 2008

 

CBOT Corn Review on Wednesday: Inches higher on technical support, crop

 

 

Technical support and lingering concerns about the crop pushed Chicago Board of Trade corn futures slightly higher Wednesday.

 

December corn ended up 2 3/4 cents to US$5.63 per bushel and March corn ended up 2 1/2 cents to US$5.80 1/2.

 

The market continues to track outside markets but found little direction Wednesday. Traders and analysts said the market has climbed on technical support and ideas the crop might be smaller than expected.

 

"Corn is trying to show a little bit of independent strength," said Joel Karlin, analyst for Western Milling. He added there was some spread trading with wheat, which was sharply lower Wednesday.

 

Karlin said there was some lingering concern about heavy rains and winds from Hurricane Ike flattening corn in some places. He added that some corn might sit out in the fields while farmers look to harvest soybeans first.

 

A trader added that some expect a supportive quarterly grain stocks report from the U.S. Department of Agriculture next week. "It probably won't be negative," he said.

 

But Karlin and some other analysts said the weather for the crop remains bearish, with recent warm weather aiding maturity and the lack of a frost threat easing concerns about whether the crop would be able to reach its full yield potential.

 

After hitting an intraday low of US$5.24 in the December contract Sept. 18, corn may have set a double-bottom on the technical charts and could be headed toward US$6.25 or higher, a trader said.

 

But Karlin said corn remains stuck in a broad range between US$5 and US$6, more specifically between US$5.25 and US$5.75 in the December contract.

 

The market opened several cents higher following overnight gains. A trader said some were hoping to ride that momentum to a stronger rally, but that follow-through buying failed to materialize.

 

Weaker crude oil weighed on the market, traders said. They added that the trade continues to monitor the government's efforts to reach an agreement on a bailout of the financial sector.

 

CBOT oats futures were down, closing at session lows. December oats ended down 9 cents to US$3.34 per bushel and March oats ended down 8 1/2 cents to US$3.51 1/2.

 

Ethanol futures were higher. December ethanol ended up US$0.024 to US$2.269 per gallon and January ethanol ended up US$0.013 to US$2.272.