December 4, 2009

 

CBOT Corn Review on Thursday: Lower on slack exports, ample supplies

 

 

Chicago Board of Trade corn futures ended lower Thursday, under pressure from slack export demand and ample U.S. supplies.

 

December corn ended down 6 1/2 cents at US$3.85 1/4 per bushel, and March corn ended 5 3/4 cents lower at US$4.00 3/4 per bushel. In pit trades, speculative fund selling was estimated at 8,000 lots.

 

The market is anchored by large supplies, with continued concerns about the pace of U.S. corn export serving as a fundamental barrier to upside movement, said Don Roose, president U.S. Commodities in West Des Moines, Iowa.

 

Corn acts like a market dealing with excess supplies in the pipeline, with cash basis levels trying to widen, Roose said.

 

Technical weakness and the absence of investment fund money to underpin prices opened the door for futures to extend Wednesday's declines.

 

The market is disappointed with the lack of speculative buying that was expected to show up at the start of the month, Roose said.

 

Meanwhile, U.S. corn prices are not competitive in world markets as feed wheat is cheaper as is corn exports from South America, he added.

 

Otherwise, the market has little bullish news to bolster price gains, as concerns about harvest delays diminish in the absence of adverse Midwest weather.

 

The DTN Meteorlogix weather forecast calls for western and northern U.S. Midwest areas to have mostly favorable harvest conditions. A colder but generally dry trend is favorable for drying and harvesting corn at this time.

 

Meanwhile, wet conditions due to rainfall Wednesday will likely slow field work progress from the Delta through the southern and eastern Midwest regions. Some slight improvement is in store due to a drier trend in the next five days, Meteorlogix said.

 

CBOT oat futures ended lower. December oats dropped 1 3/4 cents to US$2.49 3/4 a bushel, and March oats finished 1/2 cent lower at US$2.63.

 

Ethanol futures ended steady to lower. December ethanol finished unchanged at US$2.130 per gallon, and January ethanol dropped 1.7 cents to US$2.010.