April 2, 2009

 

CBOT Corn Review on Wednesday: Slips on farmer selling, profit-taking

 

 

Farmer selling, profit-taking and crude oil pushed Chicago Board of Trade corn futures lower Wednesday, analysts said.

 

May corn ended down 8 3/4 cents to US$3.96 per bushel, July corn ended down 8 1/2 cents to US$4.06 1/4 and December corn ended down 8 1/2 cents to US$4.27 1/4.

 

The market gave back much of its gains from Tuesday, as the market continued to run out of oxygen above US$4, traders said. As has happened before in recent weeks, farmers, who have held on to more grain longer than usual this season, became willing sellers with nearby May corn around US$4, traders and analysts said.

 

Funds sold an estimated 8,000 contracts, a day after heavy fund-buying sent the market surging. Traders said the rally was overdone, and that profit-taking dragged prices lower Wednesday.

 

"While the stock market overcame early selling to post triple digit gains, corn couldn't muster follow-through buying, with a late attempt at a rally failing," Farm Futures senior editor Bryce Knorr said in a market commentary.

 

Corn was pressured by crude oil, which settled down US$2.56. That weighed on corn because of both markets' ties to ethanol.

 

The trade is beginning to focus more on U.S. corn belt weather, analysts added and will be sensitive to wetness that could delay early planting.

 

A floor trader thinks ultimately Tuesday's USDA planting intentions report will be enough to push the market higher, with US$4 as a floor for nearby May rather than a ceiling.

 

"The talk now is we're going to go to different parameters," he said.

 

But there are different views of the report. Some see it as adding pressure because acreage was higher than many expected, while others say that taken as a whole, the report was "underlying supportive" to all of the grains and oilseeds, because total acreage was much lower than expected.

 

CBOT oats futures were lower. May oats were down 2 1/2 cents to US$1.90 1/2 per bushel and July oats ended down 2 1/2 cents to US$2.00.

 

Ethanol futures were lower. May ethanol ended down US$0.013 to US$1.575 per gallon and June ethanol ended down US$0.028 to US$1.594.