February 19, 2009

 

CBOT Corn Review on Wednesday: Dragged lower by weaker soybeans

 

 

Chicago Board of Trade corn futures ended mostly lower Wednesday on pressure from soybeans and a lack of supportive news, traders said.

 

March corn ended flat at US$3.49 1/4 per bushel, May corn ended down 1 cent at US$3.58, and July corn ended down 1 1/2 cents at US$3.67 1/4.

 

The market was slightly higher for much of the session despite weakness in soybeans, but slipped into negative territory when the soy market extended its losses. Soybeans ended more than 15 cents lower.

 

The wetter weather forecast is more bearish for soybeans than corn, analysts said, since the corn crop is already, in the words of one analyst, "toast." The soybean crop still has the potential to rebound nicely because of its later growing season.

 

Corn has none of its own supportive fundamental news, analysts said.

 

"We've got the same old song on the demand side," said Marty Foreman, analyst for Doane Advisory Services, noting poor ethanol and feed margins.

 

Even corn exports, which have provided an underpinning of support lately, are lagging once again, analysts said. The USDA will release its weekly export sales report Friday morning instead of Thursday because of the Presidents Day holiday this past Monday.

 

Foreman said that in a year-to-year comparison, corn exports will probably gain in coming weeks because sales were front-loaded last year.

 

The bearish world economy is keeping buyers on the sidelines, although traders say there is some underlying end-user support.

 

Some traders expect the market will hover around US$3.50 all week, which is the strike price for March puts expiring at the end of the week.

 

In other markets, CBOT oats futures continued their sharp drop, ending Wednesday with their lowest close since November 2005. A trader said that late last week funds kicked off a "campaign" to liquidate long positions, particularly in the December contract.

 

He estimated that funds have sold about 1,000 contracts since then, but that "it feels like they are pretty much done." He added that the sharp drop is prompting talk of a sharp cut in planted acreage, which could cause supply problems later on.

 

March oats ended down 4 1/2 cents at US$1.71 1/2 per bushel, and May oats ended down 4 1/2 cents at US$1.80.

 

Ethanol futures ended virtually unchanged. March ethanol ended down US$0.001 at US$1.540 per gallon and May ethanol ended flat at US$1.550.