February 12, 2009

 

CBOT Corn Review on Wednesday: Lower on outside pressure, lack of news

 

 

Chicago Board of Trade corn futures fell Wednesday on pressure from outside markets and a lack of their own supportive news, traders said.

 

March corn ended down 8 1/4 cents at US$3.68 1/2 per bushel, May corn ended 8 1/2 cents lower at US$3.78 1/2 and July corn fell 9 1/4 cents to US$3.88.

 

Weaker crude oil and a generally gloomy outlook about the global economy and its effect on world demand are weighing on corn, traders said. Better-than-expected rainfall in Argentina on Tuesday also weighed, providing pressure on soybeans that spilled over into corn.

 

Soybeans and wheat both dropped more than 10 cents Wednesday, which helped corn close near its session lows. An analyst noted that the March contract dipped below its 10-day moving average of US$3.72 1/4, which might have prompted more selling.

 

The market is ensconced in a trading range between US$3.50 and US$4, traders and analysts said. Recently improved export sales have shown that corn is well-priced, but a climb above US$4 would likely prompt farmer selling, traders and analysts said.

 

"I think there's a reluctance to really push it to the downside," said Jason Britt, president of Central State Commodities. "At the same time you look at the carryout at 1.79 billion (bushels), and you find there's not a real good reason to want to push it to the upside."

 

Analysts expect the U.S. Department of Agriculture to report weekly export sales Thursday between 850,000 and 1.2 million metric tonnes. After setting a marketing-year low, sales have rebounded and topped 1 million metric tonnes for three straight weeks.

 

In export news, the USDA announced Wednesday private export sales of 116,000 metric tonnes of U.S. corn for delivery to Taiwan in the 2008-09 marketing year.

 

The corn market had little news Wednesday and little reason not to follow outside markets, including equities and crude, a trader said.

 

"We're all moving in one direction," he said.

 

The trade is still eyeing Argentina's weather, and despite the rains Tuesday, some traders noted that long-term forecasts call for more hot, dry weather.

 

CBOT oat futures ended lower, breaking late in the day as "the boys threw in the towel," a trader said. "Mountains of oats" in Canada are weighing on the market, he said, although he was unsure why the market broke late after trading higher most of the day.

 

March oats ended down 6 cents to US$1.88 1/2 per bushel and May oats fell 7 cents to US$1.97.

 

Ethanol futures ended lower. March ethanol ended down US$0.009 to US$1.602 per gallon and May ethanol dipped US$0.016 to US$1.613.