March 25, 2010
CBOT Corn Review on Wednesday: Up after early bounce off of February low
Chicago Board of Trade corn futures ended up Wednesday, after the market bounced off of key technical support amid short-covering.
May corn ended up 2 1/4 cents to US$3.65 per bushel, and July corn closed up 2 1/4 cents to US$3.76.
Prices were driven lower in early trade thanks to a strong dollar and technical pressure, but bears were unable to drive the market below the February low of US$3.59 in the May contract. Traders say that is a key price point, with a dip below that level likely to trigger more technical selling.
Instead, prices stabilized and didn't retest that level the rest of the day. The market ended a penny off the day's highs.
Traders said that while the higher close is friendly technically, bears could still make another run at the February low.
"On the surface, to me it still looks bearish," a trader said.
The strong dollar limited Wednesday's gains, as did weather forecasts, which call for warmer temperatures next week. Flooding in the upper Midwest has not been as bad as was feared, and the warmer weather could aid farmers eager to get some fieldwork done and, eventually, planting.
Funds bought an estimated 2,000 contracts on the day.
Traders are awaiting the March 31 planting intentions report, and some say trade could remain choppy until then.
"I think we're sideways, and right now it's the countdown to the stocks and acreage report a week from today," said Chad Henderson, analyst with Prime Ag Consultants.
Short-covering has helped keep prices above the US$3.59 level, a trader said. Other traders add that end-user buying is supporting the market on breaks, as are lingering worries about spring planting.
CBOT oats ended lower. May oats closed down 1 1/2 cents to US$2.15 per bushel and July oats closed down 1 1/2 cents to US$2.23 1/2.
Ethanol futures closed lower. April ethanol was down US$0.007 to US$1.557 per gallon and May ethanol settled down US$0.010 to US$1.557.
