November 21, 2008
CBOT Corn Review on Thursday: Bearish outside markets pressure prices
Bearish equities, lower crude oil and a higher dollar combined to send CBOT corn futures lower Thursday.
December corn ended down 15 cents to US$3.63 3/4 per bushel. March corn ended down 15 1/4 cents to US$3.80 per bushel.
Worries revolving around world economic turmoil served as the catalyst to send prices stumbling from the outset. Futures did manage to trim losses near midday, but corn regained its bearish momentum heading down the stretch. A drop in the U.S. stock market, lower crude oil and a stronger dollar weighed on the market, traders said. The outside markets were the dominant feature of the day, with technical selling coming on board to accelerate the declines once active contracts breached underlying support
Traders said the breach of support was a bearish technical signal. The outside market influence wasn't new to the market, but traders cautious of taking on added risk, any sign of weakness send buyers to the sidelines, analysts added. The defensive theme is expected to remain intact until stability is brought to world financial markets.
The DTN Meteorlogix weather forecast said cold and dry weather will cover the central and western U.S. Midwest during this late week time frame. Weather conditions will favor machinery operation for harvest; however, corn drying is minimal during this delayed harvest season, and the cold air is hampering that process as well.
Forecast models looking to the end of November call for very little precipitation across the central U.S. This will enable harvest to continue at its very slow pace during the next week to 10 days.
In pit trades, speculative fund selling was estimated at 6,000 lots.
CBOT oat futures closed lower with the rest of the grain floor. December oats sank 10 cents to US$2.06 1/4 per bushel, while March oats dropped 10 cents to US$2.22.
Ethanol futures were also weaker. December ethanol closed down 4.4 cents at US$1.643 per gallon, and January ethanol fell 5.4 cents to US$1.621.