December 18, 2009

 

CBOT Corn Review on Thursday: Slides down on dollar, technical selling

 

 

Chicago Board of Trade corn futures ended lower Thursday, driven down by a stronger dollar and technical liquidation that emerged later in the session.

 

March corn ended down 13 1/4 cents to US$3.97 per bushel, and May corn ended down 13 1/4 cents to US$4.07 3/4.

 

The market was lower throughout the day thanks to a rally in the dollar, which was the dominant theme for corn and other commodities. The dollar also prompted big losses in wheat and in soy, which dropped more than 35 cents.

 

The slump accelerated as the corn market fell below key moving averages during the session, including the 10-day, 20-day, 50-day and 200-day.

 

That triggered some technical sell signals, analysts said.

 

Mike Zuzuolo, president of Global Commodity Analytics and Consulting, said that while the charts now look "ominous," there was no significant chart damage done Thursday. The market did manage to rebound 3 cents to 4 cents off the day's lows.

 

Funds sold an estimated 9,000 contracts Thursday.

 

Despite the slide, analysts say the market remains rangebound and could remain so into the new year. "We really haven't changed anything fundamentally or technically," says Dave Marshall, independent commodity broker/advisor in Nashville, Ill.

 

He added that with the holidays approaching, traders might take few risks. "Why risk the mink coat they were going to buy for their wife?" he said.

 

Analysts noted that weekly export sales reported Thursday, which topped 1 million tonnes, were supportive, but no match for the strength of the dollar.

 

CBOT oats futures ended lower. March oats were down 3 1/4 cents to US$2.59 per bushel and May oats settled down 3 1/4 cents to US$2.67 1/4.

 

Ethanol futures were lower. January ethanol ended down US$0.018 to US$1.836 per gallon and March ethanol settled down US$0.018 to US$1.808.