November 25, 2008

 

CBOT Corn Review on Monday: Gains on higher US stocks, weak dollar

 

 

Big gains in the U.S. stock market and a weaker dollar helped push Chicago Board of Trade corn futures higher Monday, traders said.

 

December corn ended up 16 cents to US$3.54 1/2 per bushel, March corn was up 16 3/4 cents to US$3.71 and May corn settled 16 3/4 cents higher at US$3.82 1/4.

 

Outside markets all pointed the market higher Monday, analysts said. U.S. stocks were higher throughout the day on news of the government's bailout of Citigroup.

 

The dollar was lower, as the bailout news and Wall Street gains made traders less risk-averse, and higher crude oil added to the bullish tonnee for corn and other commodities, analysts said.

 

"Everything came together, not necessarily from a fundamental perspective, but from an outside perspective, which has been really been providing most of the leadership for the market here recently anyway," said Shawn McCambridge, senior grains analyst with Prudential-Bache.

 

The strength in outside markets, coupled with sharp losses on Friday, led to short-covering Monday, analysts added.

 

There's little news specific to the corn market affecting prices, traders said.

 

Traders and analysts estimate Monday's crop progress report will show the corn harvest to be 84% to 88% complete, up from 78% last week. Analysts expecting more progress noted that harvest weather was ideal in most parts of the U.S. corn belt during the past week.

 

Cold, dry weather in the western U.S. corn belt this week is expected to be good for the harvest. A couple of traders noted, however, that rains are expected this week in Argentina, which are sorely needed for a crop that has been threatened by hot, dry weather.

 

Trade will likely be light throughout the week, traders said, due to the Thanksgiving holiday Thursday. The low-volume trade could lead to wider price swings, analysts said.

 

Vic Lespinasse, an analyst with grainanalyst.com, noted that historically, corn usually climbs on the day before Thanksgiving.

 

Some traders to be firm throughout the holiday season. But without signs of rebounding demand through increased export sales, the market is unlikely to see any sustained rally, analysts added.

 

CBOT oats futures were higher after dipping Friday below US$2 for the first time since 2006. A trader said volume was extremely light. December oats were up 4 3/4 cents to US$2.05 1/2 and March oats were up 5 1/4 cents to US$2.22.

 

Ethanol futures ended higher. December ethanol was up US$0.064 to US$1.642 per gallon and January ethanol was up US$0.060 to US$1.623.