November 28, 2009

 

CBOT Corn Review on Friday: Ends up on technical strength, export sales

 

 

Chicago Board of Trade corn futures ended higher Friday, shaking off early losses amid technical strength and surprisingly strong weekly export sales.

 

December corn ended up 5 1/4 cents to US$3.97 1/4 per bushel, and March corn ended up 5 1/2 cents to US$4.13 1/2.

 

The gains came amid what was seen as a bearish macroeconomic picture, thanks to concerns about debt problems in Dubai. Dubai World, the United Arab Emirate's largest corporation, late Wednesday asked for a six-month stay on debt repayments.

 

That prompted a slide in equities and gains in the dollar. Corn slid in early trade Friday along with crude oil, but rebounded as the dollar trimmed gains, analysts said.

 

A surge in weekly export sales to more than 1.6 million metric tonnes, while viewed as an aberration, nonetheless was "the floor under the market," an analyst said. The U.S. Department of Agriculture said that total sales were a 2009-10 marketing year high. Demand has lagged recently.

 

The stage for Friday's strong market performance was set Wednesday, when the market held above key technical support, analysts said. For the second day in a row, the December contract dipped below its 20-day and 200-day moving averages during the session but settled above them.

 

Ed Duggan, with Top Third Ag Marketing, said Friday's abbreviated session showed "impressive closes in the grains considering what has been going on in the world equity markets the past two days."

 

The December corn contract gained 6 1/4 cents on the week.

 

First-notice day for the contracts is Monday, which means it is the first day on which notices of intention to deliver actual commodities against futures market positions can be received.

 

Expectations for deliveries on first-notice day for the December corn contract vary widely, with quality issues serving as a wild card, according to analysts.

 

Estimates range from as high as 3,000 deliveries to as low as zero.

 

CBOT oats futures were lower. December oats ended down 3 cents to US$2.55 per bushel, and March oats ended down 3 cents to US$2.68 1/2.

 

Ethanol futures were higher. December ethanol was up US$0.015 to US$2.123 per gallon, and January ethanol was up US$0.017 to US$2.009.