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Corn trade closes limit-up

Updated: 03/31/2011 @ 1:55pm

CHICAGO, Illinois (Agriculture.com)--The corn market closed locked 'limit up' on the CME Group Thursday. Today's USDA Planting Intentions and Quarterly Stocks Report is providing all of the support for the commodities.

The May corn futures closed locked 'limit' up the daily maximum 30 cents at $6.93 1/4. Synthetically, in the options pit, the May corn futures contract settled at $7.32, that 's 39 cents above the futures 'limit up' price. The May soybean contract closed 36 3/4 cents higher at $14.09. The May wheat futures closed 36 cents higher at $7.63 1/4. The May soybean meal futures ended $10.20 per short ton higher at $370.70. The May soyoil futures closed $1.46 higher at $58.78.

In the outside markets, the NYMEX crude oil is $2.18 per barrel higher, the dollar is lower, and the Dow Jones Industrials are up 7 points.

Tomorrow's corn 'limit' will move to 45 cents. Well, the synthetic corn market traded 39 cents over the daily 'limit' today. So, many traders see the corn market opening up 25-30 cents Friday. 

Joe Bedore, FC Stone's CME Group floor manager, says it's hard to have two consecutive 'limit' up days. "If the buying shows up, the corn market could go 'limit' up again Friday," Bedore says. 

What's interesting is all corn contracts have locked limit up. Off the report, it was thought just the nearby contracts, not new-crop would go limit. 

Ray Grabanski, Progressive Ag, says the market focused on the USDA numbers today, but it will turn to weather going forward.

"Right now, the spring so far has brought adverse weather to the US, with cool/wet conditions in the Corn Belt and Northern Plains (delaying planting and ground preparation), and the HRW wheat area has been mostly warm/dry - damaging to the yield potential of the emerging crop from dormancy.  So far weather is bullish, but we are still early in the growing season." 

Tim Hannagan, PFGBest.com senior grain analyst, says all eyes turn to weather and its impact on the emerging winter wheat crop in Texas, Colorado, Oklahoma and number one wheat-producing state Kansas. "Those three states currently have winter wheat conditions at the lowest ratings in modern history. So, they are challenged now to see a turnaround in what has been very dry and now expected to be very warm and dry conditions," Hannagan says. 

In its Planting Intentions Report, USDA lowered corn and soybean 2011 stocks, supporting the grain and soybean markets. The traders say the market is nervous about supply and upcoming crop-weather.

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