January 20, 2010

 

CBOT Corn Review on Tuesday: Ends lower on wheat, soy weakness

 

 

Chicago Board of Trade corn futures ended lower Tuesday, slumping late amid pressure from wheat and soy after a day of two-sided trade.

 

March corn ended down 2 1/4 cents to US$3.69 1/4 per bushel and May corn ended down 2 1/4 cents to US$3.80 1/4.

 

Traders said the market was pinned by losses in neighboring wheat and soy, which were several cents lower all day. A stronger dollar also weighed, traders said.

 

But the market held during an early decline at US$3.68, the low for the recent plunge following last week's bearish U.S. Department of Agriculture report. Holding that support gave the market a slight boost, traders said, and prices bounced on either side of unchanged during the session.

 

Traders said the market is still digesting the USDA's large crop and carryout projections.

 

The recent break in prices from around the US$4.20 area should lure some more export business, traders and analysts said.

 

"Personally I think US$3.70 is good value," says Jerry Gidel, analyst with North America Risk Management Services. "Problem is, we need some help from other markets."

 

A trader added that farmers are reluctant sellers at current prices, and that the "market has got to force basis higher, and force the board higher, to get them to unload again."

 

Seasonally, the market typically drifts lower into February, the trader said. Traders added that this time of year is often quiet fundamentally, as it is too early to focus on spring plantings and any weather issues are mostly logistical issues.

 

Looking ahead, a trader said that Tuesday's U.S. Senate election in Massachusetts could have implications for the grains. If the Republican wins, he said, the dollar would likely surge because of the possible demise of health-care legislation. That would be bearish for grain prices, he said.

 

CBOT oats futures ended lower. March oats ended down 5 cents to US$2.26 per bushel and May oats ended down 5 cents to US$2.34 1/2.

 

Ethanol futures were mixed. February ethanol settled up US$0.001 to US$1.781 per gallon and March ethanol ended down US$0.003 to US$1.779.