August 8, 2009

 

CBOT Corn Review on Friday: Slips on crop, technical pressure; down on week

 

 

Chicago Board of Trade corn futures ended lower Friday, closing the week on a bearish note on benign weather and a stronger dollar, analysts said.

 

September corn ended down 10 1/2 cents to US$3.22 a bushel, and December corn ended down 13 3/4 cents to US$3.26 1/2.

 

After climbing almost 20 cents Monday, September corn closed down 17 1/2 cents on the week.

 

"Right now, ideas about strong production potential continue to be supported by the weather conditions that are out there across the corn belt," said Shawn McCambridge, senior grains analyst for Prudential Bache.

 

Farm Futures analyst Arlan Suderman said in a commentary that "traders saw rain on their radar screens moving out of Iowa and into Illinois and figured this weekend's heat would produce good conditions for corn."

 

The heat anticipated this weekend is expected to help a crop that remains behind schedule, and isn't a threat because it will be short-lived, analysts said.

 

Technically, the market is looking bearish, analysts said.

 

"I think we have some additional downside potential; I don't think we have the downside potential to threaten the contract lows," McCambridge said.

 

The September contract's low of US$3.04 1/2 was set last month.

 

Outside macro market influences were mixed, although a rally in the dollar was seen as bearish for corn. The stronger dollar makes U.S. exports less attractive.

 

While the supply side is bearish, traders say there also are questions about the demand side. The plunge in hogs prices this week underscores the weakness in the livestock sector and problems with feed demand, traders said.

 

The market is starting to look ahead to Wednesday's key government reports. The U.S. Department of Agriculture will release updated crop-production and carryout estimates. On average, analysts are expecting total corn production of 12.472 billion bushels with a yield of 157.1 bushels per acre, both above the USDA's July estimates.

 

CBOT oats futures ended lower. September oats were down 5 3/4 cents to US$1.99 1/4 a bushel, and December oats were down 8 cents to US$2.11.

 

Ethanol futures were lower. September ethanol ended down US$0.020 to US$1.540 a gallon, and November ethanol settled down US$0.044 to US$1.484.