November 14, 2009

 

CBOT Corn Review on Friday: Flat; mixed outside markets; up on week

 

 

Chicago Board of Trade corn futures were steady Friday, ending unchanged amid mixed outside markets, crop quality concerns and lackluster demand.

 

December corn ended down 3/4 cent to US$3.89 3/4 per bushel, and March corn ended down 3/4 cent to US$4.05.

 

Unlike last week, when the market gave back all of its early week gains, December corn ended up 23 1/2 cents on the week.

 

The market traded both sides during the session and lacked any sustained momentum. The dollar was weaker, which is usually supportive, but so was crude oil.

 

The market also has mixed signals fundamentally, although analysts generally agree the fundamental outlook doesn't support higher prices.

 

Basis has been weak, analysts said, and unimpressive weekly export sales reported Friday underscored demand problems with prices around US$4.

 

"The buyers are saying 'this is too high, I don't want to pay it right now,'" said Sid Love, analyst with Kropf and Love Consulting.

 

Although increased harvest progress has weighed on the market in recent days, a trader noted that rains in the forecast for next week will be enough to stall harvest once again.

 

Funds were even on the day.

 

An underlying supportive factor in the market, analysts say, is the prospect of index fund rebalancing in early January, which traders say should lift the market.

 

The trade is also eyeing potential quality problems with the crop, amid reports that a fungus, vomitoxin, is being found in dried distiller grain and could limit feed demand.

 

This helped boost soymeal while corn struggled Thursday and through much of Friday, although soymeal futures had retreated by Friday's close.

 

Analysts say that while the quality issues are a legitimate concern, the problem might be confined to the northeastern corn belt.

 

CBOT oats futures corrected lower Friday. December oats were down 6 1/2 cents to US$2.62 1/2 per bushel and March oats were down 6 1/2 cents to US$2.76. The December contract nonetheless was up 8 1/2 cents on the week.

 

Ethanol futures were higher. December ethanol was up US$0.045 to US$2.014 per gallon and January ethanol ended up US$0.047 to US$1.928.