December 5, 2009

 

CBOT Corn Review on Friday: 3-week lows set; outside pressure, demand lags

 

 

Corn futures at the Chicago Board of Trade ended lower Friday, backpedaling to their lowest level in three weeks on bearish outside market influences and a lack of underpinning demand.

 

December corn ended down 11 1/2 cents at US$3.73 3/4 per bushel, and March corn ended 12 1/4 cents lower at US$3.88 1/2 per bushel. In pit trades, speculative fund selling was estimated at 13,000 lots.

 

The market continued a technical correction from prior highs, facing the reality of lower usage, as attention shifts from harvest and production concerns to demand, said Shawn McCambridge, analyst with Prudential Bache in Chicago.

 

The market looks fundamentally tired, losing upside momentum on profit taking, as lackluster export demand fails to provide fundamental support, McCambridge added.

 

Meanwhile, bearish influences from outside markets added to the defensive tonnee, with a sharp rally in the U.S. dollar index, lower crude oil and tumbling gold futures attracting broad-based speculative selling.

 

Hedge related selling ahead of the weekend, with good combining conditions expected through next week helped extend the losses. Otherwise, traders took a cautious approach to the market, setting positions ahead the holidays.

 

Looking ahead, "the market is poised for range-bound activity moving toward the holidays, unless there is a definitive move in outside markets," said McCambridge.

 

The DTN Meteorlogix weather forecast calls for mostly dry conditions in the Midwest during the coming weekend. This will be favorable for drying and harvesting corn. A large winter storm system moves through the central U.S. next Tuesday. This system has the potential to cause significant problems due to wind, snow and rain in many areas, Meteorlogix said.

 

CBOT oat futures ended lower Friday. December oats dropped 6 1/4 cents to US$2.43 1/2 a bushel, and March oats finished 6 cents lower at US$2.57.

 

Ethanol futures ended lower. January ethanol finished 2.7 cents lower at US$1.983 per gallon, and March ethanol dropped 2.4 cents to US$1.886.