August 7, 2009
CBOT Corn Review on Thursday: Sinks on weather, technical pressure, dollar
Chicago Board of Trade corn futures ended lower Thursday, sinking on outside market pressure, benign weather and technical selling, traders said.
September corn ended down 14 1/2 cents at US$3.32 1/2 per bushel and December corn ended down 16 3/4 cents at US$3.40 1/4.
The market was pressured on multiple fronts Thursday, analysts said.
"It's kind of like the perfect storm today," says Don Roose, president of U.S. Commodities in Des Moines.
Outside markets set the tonnee, with a higher dollar in particular weighing on corn and other commodities, a trader said. Traders said the market also had psychological pressure from sharply lower wheat, as well as a plunge in the livestock sector, particularly hogs. Traders said livestock's weakness raises questions about feed demand for corn.
Analysts added that Informa Economics' Wednesday estimate that this year's crop would total 12.991 billion bushels, with a record yield of 164 bushels per acre, also continued to weigh on traders' minds.
The weather also seemed bearish to most traders, with this weekend's hot weather expected to be accompanied by rainfall. However, one trader said that midday weather forecasts were drier, which should have offered some support to the market.
The market opened lower and remained under pressure all day. Technically, the market appeared to break down Thursday, analysts added. The September contract is down 7 cents on the week.
"Considering we were 20 higher on Monday and by Thursday we're already lower on the week on corn, that's very, very poor," said Chad Henderson, analyst for Prime Ag Consultants.
Funds sold an estimated 11,000 contracts Thursday.
CBOT oats futures ended lower. September oats ended down 5 cents at US$2.05 per bushel and December oats ended down 5 cents at US$2.19.
Ethanol futures were lower. September ethanol settled down US$0.057 at US$1.560 per gallon and November ethanol ended down US$0.044 at US$1.528.
