September 19, 2009

 

CBOT Corn Review on Friday: Continues slide on bearish weather

 

 

Chicago Board of Trade corn futures ended lower Friday, and also posted a lower close for the week after a late slide amid bearish weather forecasts.

 

December corn ended down 11 cents at US$3.18 per bushel, and March corn ended down 10 3/4 cents at US$3.31 1/2.

 

The market was lower all day but extended its losses by a few cents late in the session. The December contract dipped below last week's close of US$3.19 3/4 on the late break.

 

The late slide came despite expectations that the market would be cautious ahead of the weekend and any potential changes in the weather forecast.

 

"The bears and the guys who think we have a big crop coming got the close they wanted," said Jim Riley, analyst for Linn Group. "I guess I was a little surprised it happened today and not Sunday night."

 

The trade is closely eyeing each update of the weather forecast for signs of frost next week and beyond. An early frost is considered by many analysts the only thing that can prevent a record crop this year.

 

The market rallied almost 30 cents on Tuesday when forecasts showed widespread frost next week. But after the Tuesday rally traders spent the rest of the week removing the weather premium as the frost threat disappeared.

 

Uncertainty about the forecast helped keep corn from falling steeper early in the day.

 

"There's an argument out there that this corn market, despite having a record crop, has actually hung in there fairly well," says Western Milling analyst Joel Karlin. "It's had a tremendous amount of bad news thrown at it."

 

Analysts expect more weakness come Monday if forecasts show no frost threat through early October.

 

Funds sold an estimated 6,000 contracts on Friday. A stronger dollar and weaker crude oil also weighed on prices, analysts said.

 

CBOT oats futures ended lower. December oats ended down 1 cent at US$2.13 per bushel, and March oats ended down 1 cent at US$2.26.

 

Ethanol futures were also lower. October ethanol ended down US$0.020 at US$1.615 per gallon, and November ethanol ended down US$0.017 at US$1.600.