March 3, 2010
CBOT Corn Review on Tuesday: Creeps lower amid technical resistance
Chicago Board of Trade corn ended slightly down Tuesday, rebounding late after spending most of the day lower.
March corn ended down 1/4 cent to US$3.70 1/2 per bushel, and May corn ended down 1/4 cent to US$3.81 1/2.
The market has come under pressure this week after it tried and "utterly failed" to climb through major moving averages Monday, said John Kleist, broker/analyst for Allendale. The market is below the 50-day, 100-day and 200-day averages.
"We don't have the wherewithal right now to justify going through those major moving averages," Kleist said.
But higher crude oil gave the market support, as did concerns about heavy snow melt and rains possibly slowing the start of U.S. planting this year. Some traders and analysts say planting is likely to be delayed, which generally hurts yields, although others say it is much too soon to be worried about that.
Traders said the market could stay range-bound headed into the March 10 supply and demand reports, which will include any crop revisions from the U.S. Department of Agriculture to the 2009 crop.
Later in the trading session, there was some floor chatter that a farm group has reported that Iowa farmers are harvesting 200-250-bushel-per-acre corn from fields that have sat in snow all winter. This would be a bearish surprise to many, as the expectation has been that the USDA will cut the 2009 crop slightly due to harvest problems. Kleist said of the farm group report, "I wouldn't doubt that for a minute."
Mike Zuzolo, president of Global Commodity Analytics & Consulting, added that another factor likely weighing on the market was reports of strong selling in the cash market.
CBOT oats futures ended slightly higher. March oats ended up 1 cent to US$2.21 1/2 per bushel, and May oats ended up 1/2 cent to US$2.30.
Ethanol futures ended lower. March ethanol ended down US$0.012 to US$1.680 per gallon, and May ethanol closed down US$0.002 to US$1.687.
