January 30, 2010
CBOT Corn Review on Friday: Ends down on wheat, soy, dollar
Chicago Board of Trade corn futures ended lower Friday, stumbling on outside market pressure and weak fundamentals.
March corn ended down 5 1/4 cents to US$3.56 1/2 per bushel, and May corn settled down 5 cents to US$3.67 3/4.
The market was lower throughout the session and fell to new lows late, following wheat and soybeans, which fell more sharply.
A stronger dollar, which surged following better than expected U.S. fourth-quarter data on gross domestic product, set the tone for commodities, a trader said.
Corn's fundamentals are seen as weak, with large U.S. and South American supplies keeping the market under pressure.
In addition to a very large 2009 crop, analysts are expecting a significant increase in 2010 acreage, thanks in part to reduced wheat acreage.
"We're just looking at a much more relaxed attitude when it comes to acreage and stocks," says Joel Karlin, analyst for Western Milling.
Analysts said bearish traders are targeting the US$3.50 market, and that seasonally the market typically declines into mid-February.
Farm Futures analyst Arlan Suderman said he expects US$3.50 to hold, and to become a key consolidation area.
"Yet, a significant break below US$3.50 would suggest a much larger change in market dynamics are occurring," Suderman said. "In the mean time, money managers continue to talk positively about corn long-term, with global demand rising faster than production."
End-user buying is limiting losses, but traders are looking for more signs of sustained demand, to demonstrate that the recent break in prices from the US$4.25 area has attracted bargain-hunters.
Funds sold an estimated 8,000 contracts on Friday.
CBOT oats futures ended lower Friday. March oats ended down 5 cents to US$2.28 per bushel and May oats ended down 4 3/4 cents to US$2.37 1/4.
Ethanol futures were mixed. February ethanol ended up US$0.003 to US$1.787 per gallon and March ethanol closed down US$0.001 to US$1.777.
