February 3, 2009

 

CBOT Corn Review on Monday: Lower on outside markets, technical selling

 

 

Outside markets, a gloomy economic outlook and technical selling pushed the Chicago Board of Trade corn market lower Monday, traders said.

 

March corn ended down 8 1/2 cents at US$3.70 1/2 per bushel, May corn fell 8 1/2 cents to US$3.81 3/4, and July corn ended 8 3/4 cents lower at US$3.92 1/2.

 

The market traded lower all day, dropping and closing below its 50-day moving average, leaving corn below all of its moving averages.

 

The market was in a "technical liquidation scenario," led by lower soybeans, said Jerry Gidel, analyst for North America Risk Management Services.

 

Corn has traded a tight range recently, but is showing signs of breaking out of the range, a trader said. Some analysts have said a break out of the range could be sharp, but the trader said that seasonally, February does not often produce sharp moves.

 

"It's not going to be a big-time slide down here, it's going to be a grind lower," he said.

 

Analysts said with weather in Argentina turning wetter, and more favorable for the crop, the market had little or no positive fundamental news Monday.

 

Demand remains weak, and analysts said that the USDA's cattle inventory report released Friday, which indicated less cattle and calves than expected, added more pressure to corn because of the prospect of further reductions in feed demand.

 

Soybeans, which were lower Monday, continue to lead corn, analysts said. Other markets, including weaker crude oil and U.S. equities, also weighed. Traders said the continued bad news about the economy is going to continue to keep a lid on demand.

 

CBOT oats futures ended lower. March oats ended down 12 1/2 cents at US$1.92 1/2 per bushel and May oats fell 12 1/2 cents to US$2.02 1/2. It was the lowest close for oats since September 2006.

 

Ethanol futures ended lower. February ethanol fell US$0.051 to US$1.550 per gallon and March ethanol ended down US$0.028 to US$1.561.