February 21, 2009
CBOT Corn Review on Friday: Down on economic gloom, but gains trimmed
Chicago Board of Trade corn futures ended lower Friday amid general economic gloom, although the market managed to trim losses before the close to end above US$3.50.
March corn ended down 3 cents to US$3.50 1/4 per bushel, May corn ended down 3 cents to US$3.59 and July corn ended down 3 cents to US$3.68 1/2.
Weaker U.S. stocks and crude oil set the bearish tonnee, analysts said. A stronger dollar also pressured, although a trader said a late slide in the greenback contributed to corn's late shift higher. Joel Karlin, analyst with Western Milling, said there was "a panoply of things" weighing on corn.
"This really feels like it was back in December, just the very putrid economic numbers, the strong tailwind of deflationary forces, it's just pummeling all these things down," said Joel Karlin, analyst with Western Milling.
The market ended 8 to 9 cents off its lows, as traders targeted the US$3.50 strike price for March puts, which expired Friday. Traders said the close above US$3.50 was positive, but that outside markets will still set the direction come Monday.
Strong export sales for the fifth straight week reported Friday helped limit losses, analysts said.
But feed demand and ethanol demand remain poor, analysts said. Karlin said one of the few supportive elements in the market recently, higher gasoline prices, has evaporated.
Gasoline is tied to corn because both are connected to ethanol, analysts say.
Weaker soybeans added pressure to corn, analysts said. Soybeans have been pressured in part by wet weather that is helping the crop and alleviating drought conditions.
But damage to corn, which has an earlier growing season, has already been done, traders said.
CBOT oats ended lower. March oats ended down US$1.68 1/2 per bushel and May oats ended down 2 cents to US$1.78.
Ethanol futures were lower. March ethanol ended down US$0.026 to US$1.519 per gallon and May ethanol ended down US$0.036 to US$1.519.
