December 12, 2009

 

CBOT Corn Review on Friday: Bounce on technical buying, crop worries

 

 

Chicago Board of Trade corn futures ended higher Friday, extending its recovery bounce on technical buying and crop concerns associated with Midwest snow.

 

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. Speculative fund buying was estimated at 11,000 lots.

 

The market managed to set a one-week high Friday, with advances accelerating on technical buying after active contracts propelled through overhead resistance on technical charts, analysts said.

 

From a fundamental standpoint, the market received residual strength from concerns for unharvested western corn-belt corn crops, said Mike Zuzolo, president of Global Commodity Analytics.

 

The market faces the possibility of at least 1/2 billion bushels of the 2009 U.S. corn crop that may not be harvested until warmer, drier conditions in the spring, Zuzolo said.

 

Mounting quality issues and uncertainty over the January annual crop report's accuracy regarding the amount of crop left in the field provided price support.

 

Otherwise, activity was light, with traders taking the opportunity to cover some short positions ahead of the weekend, overlooking the bearish influence of a firmer U.S. dollar.

 

The DTN Meteorlogix weather forecast said some light snow might dust the northern area of the western corn-belt Saturday and Sunday. The eastern corn-belt may also get some light precipitation.

 

Temperatures are also more moderate than earlier this week. The Northern Plains and northern Midwest are still seeing temperatures 10 degrees or more below normal, and other areas of the Midwest are 5 to 10 degrees below normal, but the area of below-normal temperatures is shrinking. Some sections of the Midwest will see temperatures above freezing this weekend and early next week, but on Monday temperatures will start to fall again, Meteorlogix said.

 

CBOT oat futures ended higher Friday. December oats gained 2 cents to US$2.48 a bushel, and March oats finished 3 cents higher at US$2.59.

 

Ethanol futures ended mixed. January ethanol finished 1.5 cents lower at US$1.912 per gallon, and March ethanol ended unchanged at US$1.832.