March 26, 2009

 

CBOT Corn Review on Wednesday: Ends lower on technical pressure, soy, wheat

 

 

Pressure from neighboring markets and technical weakness pushed Chicago Board of Trade corn futures lower Wednesday, analysts said.

 

May corn ended down 8 cents to US$3.85 3/4 per bushel and July corn ended down 8 cents to US$3.96 1/4.

 

After failing to extend gains in recent days above US$4 in May, the market has begun to look technically bearish, traders and analysts said.

 

"We're big on technical trading, and our technical systems are breaking down," said Don Roose, president of U.S. Commodities in West Des Moines.

 

The trade is lacking any fresh bullish news and is awaiting Tuesday's planting intentions and quarterly grain stocks reports from the U.S. Department of Agriculture. The looming report helped limit losses, analysts said, as the trade is expecting the USDA to drop its planted acreage estimate.

 

Losses of more than 25 cents in wheat and 15 cents in soybeans weighed on the market, while other outside markets were choppy and didn't provide direction, a trader said. Funds sold an estimated 5,000 contracts in corn.

 

The May contract dipped and closed below its 100-day moving average.

 

The market was unable to hold above US$4 recently largely because of farmer selling. A trader said farmer selling has stopped for now, but will resume if the market makes another run at US$4. Some analysts also say that weak demand is limiting corn's upside.

 

Views are mixed about forecasts calling for wet, chilly weather in the U.S. corn belt in the next couple of weeks. Some say that weather is supportive because it will delay early planting.

 

"It's a little early to really get all that excited about planting, but once you hit April, which isn't all that far ahead, you have to worry about it," said Sid Love, analyst for Kropf and Love Consulting.

 

Volume has been very light this week, traders said, and the thin trade "will get worse by Monday," Love said.

 

CBOT oats futures were lower. May oats ended down 4 cents to US$1.93 1/2 per bushel and July oats settled down 4 cents to US$2.02 1/4.

 

Ethanol futures were lower. May ethanol was down US$0.028 to US$1.590 and June ethanol ended down US$0.022 to US$1.613 per gallon.