January 30, 2009

Chicago Board of Trade corn futures ended lower Thursday on the weak economy and spillover pressure from outside markets, while strong export sales limited losses, analysts said.

 

March corn ended down 2 3/4 cents to US$3.81 3/4, May corn ended down 2 1/2 cents to US$3.93 and July corn ended down 2 1/2 cents to US$4.03 3/4 per bushel.

 

Lower soybeans and wheat dragged on corn, traders said. Other outside markets, including equities and crude oil, were also lower, and commodities continue to lag as a worldwide recession keeps a lid on demand, traders said.

 

"The horizon still looks weak from a demand standpoint," a trader said.

 

Analysts noted that corn performed well compared to wheat and soybeans, however, thanks to strong export sales reported Thursday morning.

 

A weekly net sales total of more than 1 million metric tonnes joins a small but growing collection of data indicating "there is some demand coming back into the market," an analyst said.

 

Jason Britt, president of Central State Commodities, added that some ethanol and cattle producers who bought corn when it was on its way to historic highs during the first half of 2008 may have finally depleted those supplies and are searching for more.

 

"I think there are a few ideas that...maybe you have worked through that high-priced corn, and you're getting some end-user buying," he said.

 

He added that cattle producers "are not necessarily nervous, but they're watching that corn pretty close" in case it rallies.

 

The market traded a very tight range Thursday of less than 5 cents. End-of-month position squaring was a factor Thursday and should remain one Friday, Britt said.

 

Analysts noted that the market is between key moving averages. It is above the 50-day moving average of US$3.79 1/2, and some analysts say a break below that could send the market down toward its January low at US$3.58 3/4. However, the market closed below the 50-day moving average on Tuesday and rebounded the next day.

 

March corn is below other key moving averages, including the 20-day moving average around US$3.92 1/4. The US$4 mark has also proved to be tough resistance in recent weeks.

 

Traders continue to eye weather forecasts for South America, particularly Argentina, traders and analysts said.

 

CBOT oats futures ended lower Thursday. The market traded a very tight range, and a trader said "it seems like everyone is waiting for something to happen." March oats were down 2 1/2 cents to US$2.11 1/2 and May oats ended down 2 cents to US$2.21 1/2 per bushel.

 

Ethanol futures ended lower. February ethanol ended down US$0.012 to US$1.586 per gallon and March ethanol dipped US$0.012 to US$1.585.