December 2, 2009

 

CBOT Corn Review on Tuesday: Lower, lacked fundamental support

 

 

Corn futures on the Chicago Board of Trade ended lower Tuesday, under pressure from a lack of fresh fundamental support and disappointment over a delayed ethanol ruling.

 

December corn ended down 3 cents at US$3.99 3/4 per bushel, and March corn ended 3 cents lower at US$4.14 1/2 per bushel. In pit trades, speculative fund selling was estimated at 6,000 lots.

 

News the Environmental Protection Agency had postponed a ruling on whether to increase the amount of ethanol added to ordinary gasoline until mid-2010 took some wind out of bullish sails, analysts said.

 

The postponement of the ethanol decision was seen as bearish because it puts off a potential increase in usage of ethanol, made from corn.

 

The market tested both sides of unchanged levels, reflective of the session's bullish and bearish influences that affected prices.

 

The absence of aggressive speculative fund buying to underpin prices and subdued export demand left futures without a spark to withstand selling interest that emerged near midday.

 

However, weakness in the U.S. dollar and lingering fears of quality problems in the 2009 U.S. corn crop helped limit downside risks.

 

The market garnered underlying additional support from concerns about the vulnerability of the 21% of the U.S. corn crop that remains in the field to damage, analysts said. Meanwhile, a pickup in delivery notices overnight generated light pressure, as it reflects ample near-term supplies, analysts added.

 

The DTN Meteorlogix weather forecast calls for a variable outlook across the Midwest. Rain returns to the southern and eastern Midwest Wednesday, likely slowing the corn harvest again. Favorable harvest conditions for corn will continue across the western Midwest through the Northern and Central Plains.

 

CBOT oat futures ended mostly unchanged. December oats gained 1/2 cent to US$2.55 a bushel, and March oats finished unchanged at US$2.67 1/2.

 

Ethanol futures ended higher. December ethanol gained 2.4 cents to US$2.159 per gallon, and January ethanol rose 2.6 cents to US$2.056.