March 16, 2010

 

CBOT Corn Review on Monday: Drift lower on fundamentals, outside markets

 

 

Corn futures on the Chicago Board of Trade ended lower Monday, under pressure from outside market influences and bearish underlying fundamentals.

 

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

 

A stronger U.S. dollar and sharply lower crude oil futures laid the ground work to keep futures on the defensive. Ample nearby supplies and sluggish export demand remain underlying features keeping buyers sidelined.

 

The market remains confined within a narrow trading range, marking time before new crop fundamentals come into focus with the planting intentions report on March 31.

 

"The price activity reflects a lack of real fundamental directives as futures are caught in limbo awaiting fresh news," said Shawn McCambridge, senior grains analyst with Prudential Financial in Chicago.

 

The market has found a base for prices, with concerns about wet weather potentially delaying spring field work and seedings provided underlying support.

 

A wet spring is seen limiting corn plantings as delayed spring field work could close the door on planting corn after a wet fall. Limited fall land preparation for planting corn this year as well about 5% of U.S. 2009 crop still needing to be harvested adds to market uncertainty.

 

The weather concerns provide some psychological strength, but its too early to get excited about weather in mid-March, said McCambridge. The weather is keeping a floor beneath prices, but not enough to provide a rally, he added.

 

Otherwise, activity was relatively quiet, with prices continuing in a sideways direction, as many traders head to the sidelines awaiting fresh directives.

 

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 lower. May oats finished 2 1/2 cents lower or 1.14% at US$2.16 a bushel.

 

Ethanol futures ended lower. May ethanol finished US$0.040 or 2.5% lower at US$1.554 per gallon, and April ethanol ended US$0.046 lower or 2.90% at US$1.539.