November 21, 2009

 

CBOT Corn Review on Friday: Lower; harvest weakness, lacks fresh support

 

 

Corn futures on the Chicago Board of Trade settled lower Friday, stumbling on harvest pressure and a lack of fresh supportive news to underpin prices.

 

December corn ended down 4 cents at US$3.91 per bushel, and March corn ended 3 3/4 cents lower at US$4.07 per bushel. In pit trades, speculative fund selling was estimated at 5,000 lots.

 

There was a general lack of interest in the market heading into the weekend, with pre-weekend hedge pressure and the management of positions as Dec options expired featured attractions, said Shawn McCambridge, senior grains analyst with Prudential Bache in Chicago.

 

There is pretty good weekend weather on tap for harvesting, and without the speculative fund-based buying seen in soybeans, traders had little fundamental incentive to push prices higher, McCambridge added.

 

However, downside risks remained limited by end user and commercial buying on breaks. A large announced sale of U.S. corn provided light price support to limit losses as well.

 

Nevertheless, the sale to Mexico was pent up demand from a regular U.S. customer, which tempered optimism on the sale as it was not seen as a surprise, McCambridge added.

 

Traders were encouraged by the markets ability to hold relatively firm in the absence of any strong bullish fundamentals. Uncertainty about the potential for a fund-based rally this year provides enough support to limit sellers aggressiveness, McCambridge said.

 

The DTN Meteorlogix weather forecast calls for a drying trend this weekend, which will help improve field conditions for harvesting through Sunday. However, some rain is possible early next week, with conditions turning cooler at the end of the week. This would be unfavorable for harvest activities and for drying of corn, Meteorlogix said.

 

U.S. Department of Agriculture on Friday said private exporters reported export sales of 458,750 metric tonnes of corn for delivery to Mexico during the 2009/2010 marketing year, and 275,250 tonnes of corn for delivery to Mexico during the 2010/2011 marketing year.

 

CBOT oat futures closed weaker with neighboring corn and wheat and amid strength in the U.S. dollar, a trader said. December oats lost 1 1/2 cents to US$2.58 a bushel, and March oats dropped 1 1/2 cents to US$2.71 1/2.

 

Ethanol futures also stumbled lower. December ethanol fell 3 cents to US$2.091 per gallon, and January ethanol slipped 2.7 cents to US$1.979.