January 3, 2009

 

CBOT Corn Review on Friday: Ends higher on crude; unchanged on week

 

 

Higher crude oil and short-covering pushed Chicago Board of Trade corn futures higher Friday, as the market extended its rally from Wednesday, traders said.

 

March corn ended up 5 1/4 cents to US$4.12 1/4 per bushel, May corn ended up 5 cents to US$4.22 3/4 and July corn ended up 5 cents to US$4.33.

 

The market was a penny or two higher for most of the day and gained a few more cents before the close. It remains firmly above key support at US$4 as well as its 50-day moving average at US$3.85.

 

"The market has given a clear indication -- not just corn, but wheat and soybeans -- that the Dec. 5 lows were fairly major," said Joel Karlin, analyst for Western Milling.

 

Higher crude oil and U.S. stocks set a supportive tonnee, although there was little fundamental news to boost the market, traders and analysts said. Weekly export sales of 269,900 metric tonnes were weak, traders added.

 

Traders and analysts add that the rally from a low of US$2.90 in the nearby contract in December has been in light volume, much of it around the holidays. Many expect the market will give back some of its gains once traders return and activity gets back to normal next week.

 

Karlin said following the Jan. 12 crop report, the market will have "a renewed focus on fundamentals" including prospects for planted acreage this year.

 

Weak demand across all sectors continues to limit corn's gains, analysts say, and corn's recent gains will only hinder any rebound in demand.

 

Funds bought an estimated 1,000 contracts. Although the market closed higher for the third straight day, the March contract ended unchanged on the week.

 

CBOT oats ended slightly higher. March oats ended up 2 cents to US$2.12 per bushel, May oats ended up 2 cents to US$2.21 1/4 and July oats ended up 2 cents to US$2.30 3/4.

 

Ethanol futures were mixed. January ethanol ended flat at US$1.620 per gallon and March ethanol ended up US$0.005 to US$1.654.