January 15, 2010

 

CBOT Corn Review on Thursday: Settles down; bearish supply fundamentals

 

 

Corn futures on the Chicago Board of Trade ended lower Thursday, stumbling on speculative selling amid bearish supply side fundamentals.

 

March corn ended down 3 cents at $3.81 per bushel, and May corn ended 3 1/4 cents lower at $3.91 3/4 per bushel. Speculative fund selling was estimated at 9,000 lots.

 

The combination of ample supplies and disappointing export demand served as catalysts to keep a bearish theme in the market, analysts said. The market rekindled its focus on Tuesday's bearish crop data, as lackluster weekly export sales reflected the poor demand base in the market.

 

However, after early attempts to pressure the market failed to attract follow-through selling, underlying support emerged to produce a consolidative, choppy atmosphere, said Bill Raffety, analyst with Penson GHCO in New York.

 

Downside pressure was limited by trader fears of anticipated index fund rebalancing buying that emerged to lift prices on Wednesday's close, Raffety said.

 

Nevertheless, the big questions of what will acreage be in 2010 and how will the demand situation play out for the remainder of the marketing year provided underlying support to temper downside pressure, he added.

 

Futures ended near session highs, finding fresh buying heading into the close.

 

Meanwhile, a technical analyst said, corn has suffered "serious near-term technical damage" this week, "strongly suggesting that a market top is in place," he said.

 

Looking ahead, traders anticipate the market will find it tough to rally prices in the face of large supplies and sluggish export demand, but fund buying and a battle for acreage could provide a spark to offset the bearish theme, analysts said.

 

Weekly U.S. corn export sales were a disappointing 327,300 tonnes, traders said. The export sales were down 10% from the previous week, 67% from the prior four-week average and toward the low end of analysts' expectations, which ranged from 250,000 to 700,000 tonnes.

 

CBOT oat futures ended lower Thursday. March oats slipped 4 1/2 cents to $2.46 a bushel, and May oats finished 4 1/2 cents lower at $2.54 1/2.

 

Ethanol futures ended higher. February ethanol finished $0.001 higher at $1.799 per gallon, and March ethanol ended $0.008 higher at $1.804.