November 8, 2008
CBOT Corn Review on Friday: Modest losses in choppy trade before report
U.S. corn futures fell slightly Friday, under the influence of choppy outside markets and ahead of a government crop report Monday, traders said.
December corn on the Chicago Board of Trade lost 2 1/2 cents to settle at US$3.75 1/2 a bushel, and March gave up 2 cents to settle at US$3.93 1/2.
Crude oil traded on both sides of unchanged during the day and a late dip into negative territory likely tugged on corn prices, a trader said.
"I don't think traders are sure what to do ahead of the report - we've been following crude oil all week," said Doug Harper, analyst at Brock Associates in Milwaukee.
Overall, the session was a "wait-and-see" affair, as traders looked to Wall Street and crude oil for direction, he said.
Corn opened higher on the coattails of a rally on Wall Street and higher crude oil prices, but traders quickly pared gains as a choppy trade developed. Also, some corn traders took profits on the opening gains after two days of losses.
The grain market, as with most commodities, continues to be pressured by fears of weakening demand as world economies slip into recession. A dismal jobs report Friday morning, in which the unemployment rate jumped to a 14-year high of 6.5% in October, was the latest evidence of a deeply troubled economy.
The Dow Jones industrial average remained higher, despite the news, and likely kept many commodity markets from steeper losses.
Recent corn export sales have confirmed this weak demand trend, brokers said.
Ahead of the close, speculative funds had purchased about 2,000 corn contracts.
Weather remains a concern in the western and central corn belt, with much corn left to harvest and wet, cold conditions setting in. The favorable harvest weather the region has enjoyed until this week has abruptly come to an end, and producers are expected to struggle to get the remaining crops out of the fields.
In places where it is too soggy, however, the cold temperatures will at least harden the ground enough that farmers can get run their combines, a trader said.
On Monday, the U.S. Agriculture Department will issue its November crop production and supply/demand report, though traders expect a small rise in yields and production.
On average, analysts expect the USDA to nudge the average corn yield up to 154.3 bushels an acre, from 153.9 bushels, pushing up 2008-09 production slightly to 12.066 billion from 12.033 billion bushels, a Dow Jones Newswires survey found.
The rise in production is expected to take ending stocks up to 1.160 billion bushels, from 1.088 billion.
Ethanol futures fell in sympathy with corn. December ethanol lost 11 cents to settle at US$1.722 per gallon, and January fell 20 cents to US$1.7200.
December oats lost 3 1/2 cents to US$2.34 1/2 per bushel, and March oats fell 4 cents to settle at US$2.50 1/4.