February 24, 2010

 

CBOT Corn Review on Tuesday: Lower on farmer selling, profit-taking

 

 

Chicago Board of Trade corn ended lower on profit-taking following recent gains and selling by farmers, traders said.

 

March corn ended down 3 3/4 cents at US$3.67 3/4 per bushel, and May corn ended down 4 cents to US$3.78 3/4.

 

The market was considered overbought following Monday's strong gain, and bearish outside markets, including a stronger dollar, added to the pressure on corn prices Tuesday, analysts said.

 

The market's recent gains have prompted more farmers to sell some grain, refilling the supply pipeline, analysts added.

 

"Once you popped over US$3.70 per bushel, you found that you had a little more cash selling going on," said John Kleist, broker/analyst for Allendale.

 

Some analysts said that losses were limited by concerns about widespread snowmelt that could make for a soggy start to the planting season, although others said it's much too soon to worry about that.

 

T-storm Weather meteorologist Mike Tannura said there's no reason yet to project below-trend yields for 2010.

 

Funds, which were heavy buyers Monday, sold an estimated 6,000 contracts Tuesday. A couple of traders said Monday's fund activity may have been the result of some early reallocation of money ahead of the end of the month.

 

Other than ethanol, demand is lackluster, some analysts said.

 

Looking ahead, traders are awaiting the March 10 supply-and-demand report from the U.S. Department of Agriculture, as well as possible revisions to the 2009 crop. Many analysts are expecting a small reduction in the size of that crop.

 

As the calendar turns over to March, traders will pay increasing attention to long-range weather forecasts and the possibility that planting will be disrupted. Bears will point out that despite very late planting in 2009, the crop still set a new record.

 

CBOT oats futures ended lower Tuesday. March oats ended down 1 1/2 cents at US$2.26 1/2 per bushel, and May oats closed down 2 cents at US$2.35.

 

Ethanol futures were lower. March ethanol ended down US$0.018 at US$1.703 per gallon, and April ethanol was down US$0.018 at US$1.701.