March 23, 2010

 

CBOT Corn Review on Monday: End lower; fundamentals pressure prices

 

 

Corn futures at the Chicago Board of Trade ended lower Monday, as bearish underlying fundamentals kept a lid on upside price movement.

 

May corn ended 3 3/4 cents lower or 1.00% at US$3.70 3/4 per bushel.

 

The absence of fresh fundamental news kept technical factors in focus.

 

"The market was confined within a narrow trading range, holding below a spider web of moving average chart resistance," said John Kleist, broker/analyst at Allendale Inc.

 

A stronger U.S. dollar and sharply lower crude oil futures laid the ground work to keep futures on the defensive in early trade. Ample world supplies and sluggish export demand remained underlying features keeping buyers sidelined as well.

 

The reversal of bearish outside market influences allowed futures to trim declines at midday, but with bean/corn spreading and a lack of real fundamental directives, futures lacked enough support to provide a rally, Kleist added.

 

Futures are seemingly passing time before new crop fundamentals come into focus with the planting intentions report March 31.

 

The market has found a base for prices, with concerns about wet weather potentially delaying spring field work and seedings providing underlying support. However, concerns about weather are still a bit premature to excite market bulls into pushing prices higher.

 

Nevertheless, a wet spring could limit corn plantings, as delayed spring field work may change farmer intentions on planting corn after a wet fall. Limited fall land preparation for planting corn in 2010 as well about 5% of the U.S. 2009 crop still needing to be harvested adds to market uncertainty.

 

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

 

Speculative funds were estimated sellers of 5,000 lots in corn. Fund activity is a measure of investment money flow in the market.

 

CBOT oat futures ended lower. May oats finished 6 cents lower or 2.67% at US$2.18 1/2 a bushel.

 

Ethanol futures ended higher. May ethanol finished US$0.004 or 0.25% higher at US$1.595 per gallon, and April ethanol ended US$0.003 higher or 0.19% at US$1.568.