June 19, 2009

 

CBOT Corn Review on Thursday: Lower on technical pressure, weather

 

 

Chicago Board of Trade corn futures ended lower Thursday on technical pressure, good crop weather and a lack of supportive news, analysts said.

 

July corn ended down 4 1/2 cents to US$4.03 1/4 per bushel, September corn ended down 4 1/2 cents to US$4.11 3/4, and December corn ended down 5 cents to US$4.23 3/4.

 

The market is "technically heavy," said Jason Ward, analyst for Northstar Commodity Investment Co. Funds built a big long position in the market during the past seven weeks before the market broke about 40 cents. Although they haven't liquidated en masse so far, that could be because they couldn't get out fast enough, he said.

 

"Before when we set back we always had a bid underneath us," Ward said. "Now it feels like we have a steady seller above us."

 

He added that "you're at a time of the year when you can't kill the crop," as it is already planted and the weather dangers that could harm it are not yet in the picture.

 

Analysts mostly see the weather as bearish, as plenty of rainfall and warming temperatures are a good recipe for the crop. Some analysts say the potential for excessive rains or heat still bear watching, however.

 

The July contract has led the way lower, said John Kleist, broker/analyst with Allendale, as traders roll out of their July positions.

 

Weakness in wheat also pressured corn, Ward said.

 

Traders and analysts said the market's downside is limited. Support for July corn is seen at US$4, but Kleist says "dead-bolt" support sits in the US$3.94 1/2-US$3.97 1/2 range.

 

Views of export sales, which topped 1 million metric tonnes for old crop and new crop combined, were mixed. Kleist said the sales "weren't all that dramatic," while Ward said the sales were very strong.

 

The trade is looking ahead to a private firm's release of planted acreage estimates, which is expected during trading hours Friday. Ward said the market could move sideways until the U.S. Department of Agriculture's acreage report on June 30.

 

CBOT oats futures ended lower. July oats ended down 2 3/4 cents to US$2.11 1/2 per bushel and December oats settled down 2 1/2 cents to US$2.35.

 

Ethanol futures were lower. July ethanol settled down US$0.011 to US$1.713 per gallon and November ethanol ended down US$0.020 to US$1.690.