March 19, 2009

 

CBOT Corn Review on Wednesday: Down slightly as wheat, crude pressure

 

 

Chicago Board of Trade corn futures dipped slightly Wednesday on pressure from crude oil and wheat, as the market consolidated for a second straight day, analysts said.

 

May corn ended down 2 1/4 cents to US$3.88 1/4 per bushel, July corn ended down 2 1/4 cents to US$3.98 1/2 and December corn closed down 2 cents to US$4.18 3/4.

 

The market has little news to digest, traders said. Farmer selling is hanging over the market, and sharply lower wheat and weaker crude oil added pressure to corn Wednesday, traders said.

 

Given the outside market pressure - equities were also lower for much of the day - the corn market was "holding together extremely well," said Rich Feltes, director of research for MF Global.

 

Relatively strong recent export demand is underpinning the market, as are concerns about planted acreage, analysts said.

 

"The new crop outlook gets pretty bullish," said Mario Balletto, analyst for Citigroup.

 

Some traders and analysts say that the market could continue to struggle for direction until the U.S. Department of Agriculture issues its planting intentions report March 31. Analysts say private estimates of reduced acreage have been mostly supportive, and Feltes added that historically trade expectations leading into the March 31 report have proven to be higher than the USDA's actual estimates.

 

A trader said consolidation continued for a second consecutive day Wednesday following recent gains that pushed the market close to US$4.

 

"Anyone who wanted to sell has done so, and now we're waiting to see if the next leg is toward US$4 or US$3.65,"

 

The May contract dipped and closed below its 100-day moving average, although it is still 13 cents above that average on a continuation chart.

 

Some analysts say that it's not clear there is enough demand, particularly in the face of farmer selling, to climb above US$4 in the nearby contract.

 

CBOT oats futures ended virtually unchanged. May oats climbed 1/4 cent to US$1.93 1/4 and July oats settled flat at US$2.02.

 

Ethanol futures were slightly lower. May ethanol ended down US$0.008 to US$1.567 and June ethanol settled flat at US$1.610.