March 4, 2009

 

CBOT Corn Review on Tuesday: Ends flat to slightly up, follows outsides

 

 

Chicago Board of Trade corn futures finished flat to slightly up Tuesday after fluttering between gains and losses in reflection of the patterns exhibited by crude oil, equities and the U.S. dollar.

 

March corn ended flat at US$3.43 1/2. The most actively traded May corn contract added 1/4 cent to US$3.50 1/2. The contract traded in a 7-cent range, topping at US$3.54. July corn gained 1/4 cent to US$3.59 3/4.

 

Speculative funds bought an estimated 2,000 CBOT corn contracts, according to midday-close estimates.

 

With no major technical barriers breached in either direction, "corn's just consolidating; they haven't been able to punch through the downside," a CBOT floor trader said.

 

In essence, corn was a follower, moving "tick for tick with the stocks, which are moving tick for tick with the crude oil," he said.

 

Outside market forces will dominate the rest of the week until Friday, when some light buying and short-covering may emerge ahead of the U.S. Department of Agriculture's supply and demand report due for release at 7:30 a.m. EST March 11, said Tim Hannagan, senior market analyst at Alaron Trading.

 

The same pattern should hold true for the rest of the month, he added, noting crude oil will be the leading indicator, followed by the U.S. dollar index and then the equities markets. Another round of buying will likely ensue ahead of the USDA's March 31 prospective plantings report, he said.

 

Uncertainty surrounding Argentina's plans to expand the government's role in the grain and beef trade is keeping a floor under the market, Hannagan added.

 

Argentine President Cristina Fernandez joined a meeting Tuesday between government officials and farmers in Buenos Aires, but no official developments have yet been reported from the meetings.

 

The country's corn output was limited by drought this year. Production is forecast to total between 12.5 million and 13.8 million tonnes, the Agriculture Secretariat said. Argentina's farmers harvested 20.5 million tonnes last season.

 

In other markets, CBOT May oat futures closed down 6 cents at US$1.85 a bushel.

 

Ethanol futures closed down US$0.018 cents to US$1.492 a gallon in the nearby March contract. May ethanol dropped US$0.010 cents to US$1.500.