March 2, 2010
CBOT Corn Review on Monday: Lower on dollar, wheat, fund-selling
Chicago Board of Trade corn futures ended lower Monday amid pressure from a stronger dollar, slumping wheat and fund-selling.
March corn ended down 7 1/4 cents to US$3.70 3/4 per bushel, and May corn ended down 7 1/4 cents to US$3.81 3/4.
The market was unable to extend last week's rally, which traders said was in part due to anticipation that funds would be buying corn on the first day of the month. When it failed to materialize later early in the session, the market sank.
"Either it didn't show up, or there was just a little bit, and everyone had to get the heck out," a floor trader said. Ultimately, funds sold an estimated 10,000 contracts during the session.
A stronger dollar set a negative tonnee for commodities generally, analysts said, and helped push wheat sharply lower. Soy were slightly higher, and traders said there was spread-trading, with buying of soy and selling of corn- a reversal from last week's trade.
Traders and analysts noted that the day was not positive technically, as the market was unable to climb past key moving averages. The market has also been unable on the rally to fill in a gap on the technical chart dating back to the U.S. Department of Agriculture's bearish Jan. 12 crop estimates.
Losses were limited by concerns about spring planting in the U.S., traders said. Some analysts have noted the large snowpack in the Midwest, and say that it could take a long time to melt and cause flooding when it does, giving the planting season a slow start. They say that's reason to leave some risk premium in the market.
Others say that with any significant planting at least a month away, it is too soon to worry about excessive moisture.
CBOT oats were mostly lower. March oats ended down 1/2 cent to US$2.20 1/2 per bushel and May oats closed down 1 cent to US$2.29 1/2.
Ethanol futures were lower. March ethanol ended down US$0.022 to US$1.692 per gallon and April ethanol closed down US$0.026 to US$1.689.
