March 14, 2010

CBOT Corn Review on Friday: Grind lower on bearish fundamentals

Corn futures on the Chicago Board of Trade ended modestly lower Friday, garnering mild pressure from bearish underlying fundamentals.

May corn ended 1 cent lower or 0.27% at US$3.64 1/4 per bushel.

The market has a generally bearish attitude, with the hangover affect of negative supply and demand fundamentals resulting from ample supplies and lagging demand weighing on prices, said Jack Scoville, analyst with Price Futures Group in Chicago.

The fundamentals make it tough to attract buyers in the absence of fresh supportive news, he added. Technical selling aided the defensive tonnee, with a reversal in crude oil futures from early gains attracting some speculative selling as well. Corn is linked to crude oil because ethanol is made from corn and funds often trade in a basket of commodities.

However, the market did show some resilience in the face of bearish factors, as uncertainty ahead of the 2010 planting season limited downside pressure. Continued concerns that wetness in the U.S. Midwest could delay corn planting in the spring kept the markets cautious as attention begins to shift to planting intentions, analysts said.

"The market has shown signs of finding value near the February lows of US$3.60 basis May futures, and it may be a sign that a near term low is in place," Scoville said.

Speculative funds were estimated sellers of 3,000 lots in corn. Fund activity is a measure of investment money flow in the market.

CBOT oat futures ended higher. May oats finished 2 cents higher or 0.92% at US$2.18 1/2 a bushel.

Ethanol futures ended lower. May ethanol finished US$0.019 lower or 1.18% at US$1.594 per gallon, and April ethanol ended US$0.019 lower or 1.18% at US$1.585.