January 31, 2009

 

CBOT Corn Review on Friday: Stumbles amid lack of supportive news

 

 

Chicago Board of Trade corn futures ended slightly lower Friday, as the market drifted amid a lack of supportive news, traders said.

 

March corn ended down 2 3/4 cents to US$3.79 per bushel, May corn ended down 2 3/4 cents to US$3.90 1/4, and July corn ended down 2 1/2 cents to US$4.01 1/4.

 

The market traded both sides during the session and fell late, with preweekend and end-of-month selling seen as factors.

 

"We saw soybeans lead corn higher, but we just couldn't hold the momentum," said Arlan Suderman, analyst for Farm Futures. "Demand seems solid underneath of the market, but not enough to establish strength on its own."

 

The March contract closed right at its 50-day moving average on Friday, but below its 20-day moving average of US$3.91.

 

The market is stuck in a range, analysts said, and has in recent days been trading around its major moving averages, which have converged.

 

Suderman said "that's what you see during times of uncertainty." There is considerable anxiety and disagreement about which way the market will move when it breaks out of the range, Suderman said. At the center of the disagreement are questions about whether corn needs to climb to buy planted acres this year, he said.

 

The market continues to watch weather forecasts for Argentina, with slightly drier midday forecasts adding support, said Joel Karlin, analyst for Western Milling. Forecasts call for rain Monday and Tuesday in the drought-stricken country, but traders said there was caution ahead of the weekend due to the possibility the forecast could change.

 

Karlin said that although export sales reported Thursday were strong, demand remains weak for ethanol and feed.

 

Climbing gasoline prices could be a mildly supportive element, Karlin said. Corn is tied to energy because of its role in ethanol, analysts say.

 

CBOT oats futures ended lower. March rice ended down 6 1/2 cents to US$2.05 per bushel and May rice ended down 6 1/2 cents to US$2.15. A trader said commercial selling pressured the market.

 

Ethanol futures ended slightly higher. February ethanol ended up US$0.015 to US$1.601 per gallon and March ethanol ended up US$0.004 to US$1.589.