February 14, 2009

 

CBOT Corn Review on Friday: Dips on technical selling, pre-weekend caution

 

 

Chicago Board of Trade corn futures ended slightly lower Friday on technical selling ahead of the long holiday weekend.

 

March corn ended down 3 cents at US$3.63 1/4 per bushel, May corn ended down 2 3/4 cents at US$3.73 1/4, and July corn ended down 2 1/4 cents at US$3.83 1/4.

 

Corn is in a weak technical position and lacked any bullish news to support a rally, analysts said. The market traded both sides of unchanged during the session.

 

"Often you set trading cycle highs and/or lows around a three-day weekend," said Dave Marshall, independent commodity broker and advisor in Nashville, Ill. "And the way the charts have been set up and momentum indicators set up, I do see this as being more of a low than a high."

 

After trading around key 10-day, 20-day and 50-day moving averages recently, the market has broken below all of them this week. The nearby contract lost 14 cents on the week.

 

Brian Hoops, president of Midwest Market Solutions, noted "some more technical selling, and we don't have much in the way of positive influence."

 

A trader added there was light farmer selling Friday and that South American rainfall added pressure. Stronger crude oil and a stabilized equities market offered support, he said.

 

Traders were cautious ahead of the holiday weekend, especially with uncertainty about the weather in Argentina as well as a potential farmers strike there. The market will be closed Monday for Presidents Day.

 

The market is range-bound between US$3.50 and US$4, analysts said. Recently strong export sales and end-user buying has supported the market at the low-end of the range, while farmer selling and ongoing concerns about weak demand makes a climb above US$4 unlikely, they said.

 

Oats futures ended lower. March oats were down 6 cents at US$1.84 1/2 per bushel, and May oats were down 5 cents at US$1.93 1/2.

 

Ethanol futures ended slightly higher. March ethanol ended up US$0.002 at US$1.595 per gallon, and May ethanol ended up US$0.001 to US$1.604.