December 16, 2009

 

CBOT Corn Review on Tuesday: Ends lower as dollar, demand weigh

 

 

A stronger dollar and weak demand pressured CBOT corn lower Tuesday, although the market continues to see speculative buying interest, traders said.

 

March corn ended down 1 cent to $4.07 1/2 per bushel, and May corn ended down 1 cent to $4.18 1/4.

 

The market was due for a correction following its recent 25-cent climb, and the stronger dollar served as an excuse to push prices lower, traders said.

 

About the strongest factor working in corn's favor is soy demand, analysts said. Soy ended mixed on the day.

 

"You look at the wheat and corn side of it, with just no export business, then you start pushing resistance levels, you're in trouble," says Chad Henderson, analyst with Prime Ag Consultants.

 

But losses were muted, as the prospect of index fund rebalancing at the start of the year continues to lend support, prompting participants to buy breaks in prices, traders said.

 

"I don't see us backing up anytime soon," one trader said.

 

At the same time, he and other traders said the market is range-bound, and that weak demand will limit the upside. Export demand in particular has been disappointing, according to most analysts.

 

There was some business reported Tuesday, however. Private exporters reported to the U.S. Department of Agriculture export sales of 120,000 metric tonnes of corn for delivery to Taiwan during the 2009/2010 marketing year, the USDA said Tuesday.

 

Funds sold an estimated 2,000 contracts.

 

Traders said the market could remain range-bound into the new year. They added that December trade will continue to be thin because of the holiday season, and that the thin trade could make for wild price swings.

 

CBOT oats futures ended higher. March oats rose 1 1/4 cents to $2.60 per bushel and May oats ended up 1 1/4 cents to $2.68 1/2.

 

Ethanol futures were mixed. January ethanol was down $.016 to $1.865 per gallon and March ethanol was up $0.013 to $1.822.