US corn futures on the Chicago Board of Trade rose 5.8 percent on Thursday amid technical buying spurred by stronger equity and crude oil markets, traders said. Corn gained on soyabeans amid hopes more corn would be turned into ethanol and prospects for US farmers to plant less corn in 2009 than a year ago and more soya.
CBOT March corn closed 20-3/4 cents higher at $3.76-3/4 a bushel. May ended up 20-3/4 cents at $3.85-1/4. Commodity funds bought an estimated 12,000 corn contracts, covering short positions.
Futures volume was one of the biggest of the new year estimated at 291,742 futures. Options trade seen at 67,323 contracts. New-crop November soyabean/December corn price ratio closed at 2.02 to 1, a level that tends to favour corn acres over soyabeans. It closed at 2.06 to 1 on Wednesday. General rule of thumb is a ratio of 2.2 to 1 is the "indifference" point where plantings could go either way - above 2.2 to 1 favours soya, below 2.2 to 1 favours corn.
Blender margins have improved since late February as gasoline prices have risen relative to ethanol. Corn is the key feedstock used to produce US ethanol. Increased ethanol use also seen if government approves a higher ethanol blend rate in gasoline to 12 to 13 percent from 10 percent backed by USDA Ag Secretary.
USDAs big corn export number was also supportive. USDA said 1,092,300 tonnes (old-crop) of corn sold for export last week, above estimates for 450,000 to 750,000 tonnes. Traders awaiting private US soyabean and corn planting estimates from private analysts on Friday.
American farmers seeded 75.7 million soyabean acres and 86 million to corn. USDA to issue planting intentions report on March 31. Last trading day and expiration of March contracts is Friday. US Midwest basis bids for corn were steady/weak late Thursday after a pick up in farmer corn sales spurred by CBOT rally.
US Midwest turning warmer and drier next week, improving prospects for soils to dry out so field work can commence soon -DTN Meteorlogix forecaster. Deliveries on March 609 lots. CBOT oats closed 5 to 5-1/4 cents higher, following the other grains higher. March oats ended 5-1/4 up at $1.80 a bushel. May up 5-1/4 at $1.87. Estimated volume light at 421 futures and 10 options.
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