February 20, 2009
CBOT Corn Review on Thursday: Higher on short-covering, outside support
Chicago Board of Trade corn futures rebounded Thursday thanks to stable outside markets and short-covering, traders said.
March corn ended up 4 cents to US$3.53 1/4 per bushel, May corn ended up 4 cents to US$3.62, and July corn ended up 4 1/4 cents to US$3.71 1/2.
The market was considered oversold after recent losses, and climbed on a technical bounce Thursday, analysts said.
"The market's tired of going down, and who is going to rush in and sell it?" says Sid Love, analyst with Kropf & Love Consulting. He said prices can't dip further without cutting into planted acreage this season.
Outside markets helped set the tonnee, as crude oil climbed, the dollar was weaker and equities, while lower, were more stable, analysts said. Gains in wheat also supported, traders said.
Traders and analysts added that cash markets are supportive, as farmers are reluctant to sell.
The trade is also expecting strong weekly export sales on Friday, with analysts projecting sales between 800,000 and 1.2 million metric tonnes.
An analyst said export sales continue to provide underpinning support. Sales have topped 1 million metric tonnes for four consecutive weeks.
Some traders see the US$3.50 in the March contract as a key battleground through the end of the week. That's the strike price for March puts that expire Friday.
The market's ability to climb back above US$3.50 is a positive technically, another floor trader said, adding that the market could remain between US$3.50 and US$4.
An analyst noted there was not much follow-through to the rally Thursday and that there is little bullish news for the market.
CBOT oats futures ended flat after trading higher during much of the session. March oats closed at US$1.71 1/2 per bushel and May oats ended flat at US$1.80.
Ethanol futures ended slightly higher. March ethanol ended up US$0.005 to US$1.545 per gallon and May ethanol ended up US$0.005 to US$1.555.
