January 16, 2010

 

CBOT Corn Review on Friday: Lower as USDA data still overwhelms market

 

 

Chicago Board of Trade corn futures ended lower for the fifth consecutive trading day Friday, remaining under the bearish influence of Tuesday's crop reports.

 

March corn ended down 9 1/2 cents at US$3.71 1/2 per bushel, and May corn ended 9 1/4 cents lower at US$3.82 1/2 per bushel. Speculative fund selling was estimated at 11,000 lots.

 

The market continues to adjust to a new set of fundamentals, reflective of higher-than-expected production and stocks data from U.S. Department of Agriculture, said Shawn McCambridge, analyst with Prudential Bache.

 

The report has taken the upside momentum out of the market, as underlying fund buying during the week has been overwhelmed by the USDA's data, he added.

 

Sluggish export demand and the inability of futures to gain any traction after tumbling earlier in the week continue to send buyers running for cover. A firmer U.S. dollar, coupled with weakness in crude oil and metal futures, provided additional pressure to keep prices firmly planted in negative territory.

 

Otherwise the market was engaged in consolidative action, with prices hovering in a range below overhead technical resistance levels. The ability of the March contract to hold support above the week's lows at US$3.68 was seen as a small victory for market bulls, as traders evened some positions ahead of the extended holiday weekend.

 

Looking ahead, "the market is poised to consolidate while establishing a new trading range, as the market does not have any fresh fundamentals on the horizon to impact prices in the next few weeks," McCambridge said.

 

In other news, private exporters reported sales of 116,000 metric tonnes of corn for delivery to unknown destinations during the 2009-10 marketing year, USDA said Friday.

 

CBOT oat futures ended lower Friday. March oats dropped 15 cents to US$2.31 a bushel, and May oats finished 15 cents lower at US$2.39 1/2.

 

Ethanol futures ended lower. February ethanol finished US$0.019 lower at US$1.78 per gallon, and March ethanol ended US$0.022 lower at US$1.782.