Meanwhile the next round of crushing food inflation gets baked in. Thank God for the refi boom, so people can pay for this:
Reuters
CBOT corn hits 7-1/2 year top on US acre estimate
Wednesday March 31, 12:25 pm ET
CHICAGO, March 31 (Reuters) - Chicago Board of Trade (News - Websites) corn futures rallied to a 7-1/2 year high on Wednesday, boosted by a bullish USDA acreage estimate released before the open, traders said.
The May corn contract (CK4) climbed 9-1/2 cents to $3.21-3/4 per bushel, the highest price for the spot month since September 1996. But the biggest gains were in the new-crop months, up more than 10 cents a bushel, with new contract highs across the board by 11:00 a.m. CST (1700 GMT).
New-crop December (CZ4) was 10-1/4 cents higher at $3.17, following its climb to $3.22.
Buying was active and scattered among commission houses, traders said.
The catalyst for the rally was USDA's planted acreage estimate, traders said.
In Wednesday's much awaited crop report, USDA forecast that U.S. farmers would plant 79.004 million acres of corn this spring. Traders and analysts expected plantings to be above 80 million acres to meet the large projected demand for U.S. corn in 2004/05. The average analysts' seeding estimate was 80.290 million acres, which would have been the highest in 19 years.
The government also put U.S. corn stocks as of March 1 at 5.271 billion, slightly below trade expectations for 5.275 billion but above year-ago stocks of 5.132 billion.
"One of the things that concerns me more than anything else is that seven out of the last eight years we've seen final corn acreage be below the March estimate. So, if you think that today's estimate was on the low side, history strongly shows that corn acreage ends up being lower," said Randy Mittelstaedt, an analyst with R.J. O'Brien.
Grain analysts anticipated a large corn seeding number to meet next year's demand guessed at a record 10.4 to 10.5 billion bushels. Most of that demand was seen coming from the production of corn-based ethanol.
"It's definitely taken the turn for the longer term bullish scenario on corn, there's no doubt about that," said Mittelstaedt.
Overnight export business featured South Korea's MFG buying 105,000 tonnes of optional-origin feed corn and South Korea's KOCOPIA buying 52,500 tonnes of optional-origin food grade corn.
Taiwan is expected to tender on Thursday for 23,000 tonnes of U.S. corn and 12,000 tonnes of U.S. soybeans.
CBOT oat futures were 3 to 5-3/4 cents per bushel higher, with May (OK4) up 3 at $1.75.
Support stemmed from a smaller acreage estimate for 2004. USDA expects U.S. farmers to plant 4.3 million oat acres this spring, down from 4.6 million seeded last year. |
