June 17, 2009

 

CBOT Corn Review on Tuesday: Drift lower; lacked fresh support

 

 

Corn futures on the Chicago Board of Trade ended lower Tuesday, backpedaling from initial gains on a lack of fresh support to underpin prices, analysts said.

 

July corn ended down 2 cents at US$4.04 per bushel, and December corn ended 2 1/2 cents lower at US$4.25 1/4 per bushel.

 

The market was in a consolidation mode, with mixed signals in outside markets and beneficial weather conditions for developing crops generating pressure to offset initial strength from a weaker U.S. dollar, said Shawn McCambridge, senior grains analyst at Prudential Bache in Chicago.

 

Futures initially spiked higher on a recovery bounce from recent setbacks on a drop in the U.S. dollar and supportive outside market influences.

 

However, as the day unfolded the market lost its outside support, leaving futures vulnerable to corrective sales in the absence of fresh bullish news to underpin prices, McCambridge said.

 

The market lacked anything overtly bullish to keep buyers enthused, keeping the market spinning its wheels as it settles into a reactionary type market awaiting fresh news to produce definitive moves, as traders await the June 30 stocks and acreage reports.

 

Looking ahead, the market is poised to stay in a consolidative mode in the short term amid favorable near term crop weather conditions. Traders are taking a cautious approach ahead of U.S. Department of Agriculture quarterly stock and acreage data or until a fresh spark is ignited from outside markets or fundamental news, McCambridge said.

 

DTN Meteorlogix weather forecast said the next week to 10 days features a generally warmer temperature pattern across the central U.S. This round of warmer weather will improve growing conditions and progress. Western Midwest areas - Iowa, Minnesota and Nebraska - will be the big beneficiaries of this improved temperature pattern. In the eastern Midwest, the heat may cause some stress to crops in areas where plants have shallow root systems as a result of very wet soils.

 

CBOT oat futures closed lower. July oats lost 5 1/2 cents to US$2.13 a bushel, and September oats dropped 6 cents to US$2.22.

 

Ethanol futures finished mixed. July ethanol rose 1.2 cents to US$1.739 per gallon, and September ethanol slipped 1.5 cents to US$1.71.