December 5, 2008
CBOT Corn Review on Thursday: Spirals to new lows on bearish influences
The downward spiral of Chicago Board of Trade corn futures continued Thursday, with prices stumbling to new contract lows amid bearish fundamental and outside-market influences.
December corn ended down 13 3/4 cents at US$3.18 1/4 per bushel, and March corn ended 14 1/4 cents lower at US$3.34 per bushel.
The absence of fresh supportive news to inspire buyers kept a defensive tonnee in the market, with lagging export demand and bearish outside market influences attracting speculative sellers, analysts said.
Global economic weakness is keeping buyers sidelined, with lackluster weekly export sales reinforcing demand issues, analysts said. Increased feed wheat competition added to the demand woes, with higher wheat production forecasts from Statistic Canada and continued pressure from crude oil setting the stage for the day's losses.
Demand issues remain a key fundamental barrier to upside momentum, as end-users stay in a hand-to-mouth buying mode until better price action develops, analysts added.
U.S. Department of Agriculture reported total weekly corn export sales were a net 392,000 metric tonnes for the week ended Nov. 27. Sales for the 2008-09 marketing year totaled 387,000 tonnes, down 17% from the prior week and 10% below the prior four-week average.
DTN Meteorlogix weather said forecast models indicate no rainfall over Argentina and southern Brazil in the next five days. Argentina crops will have very little stress due to recent improvement in soil moisture because of rain in the last two weeks. However, southern Brazil faces some dry-weather stress to early row-crop progress because of prevailing dry conditions.
In pit trades, speculative fund buying was estimated at 5,000 lots.
CBOT oat futures closed lower. December oats fell 7 cents to US$1.98 1/2 per bushel, and March oats dropped 7 1/2 cents to US$2.13 1/2.
Ethanol futures tumbled. January ethanol finished down 6.4 cents at US$1.489 per gallon, and March ethanol settled down 5 cents at US$1.513.