The corn market closed higher on Wednesday as traders continue to worry about getting corn planted. The July corn closed 6 ¾ higher and the December closed 7 cents higher as rains swept across Iowa and Illinois shutting down the corn planters that for many farmers just started rolling for the first time on Saturday. Weather remains the dominate factor for traders when looking at the corn market as rain is falling now and the forecast calls for rain again next week. Some of the hardest hit areas in Iowa got 2-3 inches of rain, so even if it stopped raining today, they couldn’t plant for a week putting right against the magic May 15th date. Outside markets offered mixed signals for corn as crude oil traded at record levels and closed strong, but the US$ was stronger again making US exports more expensive to the world. The corn market is still in a trading range and the market keeps having trouble breaking out to the top side. It will continue to be very difficult for corn to get up and going this time of the year, or at least the next 2 weeks, unless the market hears of confirmed reports of farmers stopping to plant corn and planting beans. Volume was moderate at 250,000 contracts and funds bot 6,000+ contracts at the end of the day.
Overnight, corn traded higher again as the rain keeps falling, but traders don’t want to jump in with both feet because of the time of the year and there is still time to plant corn. That window for planting corn is still open, but it is closing quickly, especially with the current forecast calling for rain through next week. The corn market will probably trade in a choppy pattern today in anticipation of the S&D report tomorrow morning before the opening. Usually not a huge report, but with today’s markets and the ending stock situation, it becomes important. Some talk around the markets that the government will have to make the numbers fit so the ending stocks isn’t negative, so it will be very interesting to see what they publish tomorrow. Analysts are estimating corn ending stocks of 1.383 to 1.238 with the average estimate/guess at 1.311 vs. the March estimate of 1.283. Ending stocks estimate for 08/09 is .685. There is talk of the strike in Argentina beginning again this week, so that could lift soybeans and help support the corn market. The corn market should open higher inline with the overnight closes and then look for direction. The crude market has been both higher and lower since the grains closed, but it could have an impact on corn if it gains momentum in one direction or the other.
Globex Overnight
Contract Last Net Change High Low
ZCK8 602^2 0^6 602^4 602^2 ZCN8 615^2 2^2 617^4 612^4 ZCU8 625^6 3^0 627^0 622^0 ZCZ8 633^2 2^6 635^0 629^6 ZCH9 646^6 5^2 646^6 641^0
Early Opening Calls: 2-4 cents better
Top News
**USDA Corn 07/08 Export Sales Net: 337,200 mt; 08/09 Net: 63,300 mt; expected 450-650k mt
-- Analysts expect Friday's USDA report to show 2008 Corn ending stocks at 1.31 bln bu., while 2009 ending stocks are projected at average estimate of 0.69 bln bu. -- Turkish media is reporting that its state grain board has said it will soon tender for import of 150,000 mt of Corn. -- Inflation in China during April was pegged at 8.5% on annualized basis, above expectations of being unchanged from the prior month's 8.3% pace. -- 100,000 mt of barley tender was issued by Jordan's state grain buying arm on Monday, the bid deadline is May 20th. 50,000 mt are expected for LH June & the other 50k mt are expected in FH July -- CBOT May Corn Delivery: 406 -- Dalian Corn futures ended trade overnight largely unchanged across all contract, the active Jan futures settled at 1,974 Yuan/mt -- Globex Corn Vol: 211,456; Pit Vol.: 41,557; Open Interest change: + 3,235 -- Weather: 6-10 Day Forecast: Below Normal Temps. Above Normal Precip. The eastern Corn Belt will see showers ending later today. The western Corn Belt will see a few showers Friday. Saturday looks mostly dry. Showers return Sunday west to east. Temps normal to below -- Outside markets: Energy Complex +0.13 at $123.66; Gold & Silver: +7.2 at $878.4 & -0.143 at $16.492; US $ is trading better vs. Euro & is slightly lower vs. Yen.
Cash Markets
-- CIF Corn off 1 to 3 . May +17 to +21, June +28 to +30, July +36 to +38, Oct. +40 to +43, Nov. +40 to +43 Dec. +43 to +47
TREND:
The corn market continues to base. Unable to build momentum to the upside or downside. Continue to favor buying weakness.
If you have any questions, or if you would like to discuss specific trade recommendations on any markets, contact me directly.
Jim Riley Linn Group 877-787-6278 jriley@linngroup.com
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