December 23, 2008
CBOT Corn Review on Monday: Up slightly amid pre-holiday positioning
Chicago Board of Trade corn futures inched slightly higher Monday in light, pre-holiday trade, with weak demand limiting any bullish sentiment, analysts said.
March corn ended up 1 cent to US$3.81 3/4, May corn was up 1 cent to US$34.92 and July corn settled up 1 1/2 cents to US$4.02 1/2 per bushel.
Prices had been a couple cents lower for most of the day before mounting a mild rally late. The market tends to gain in the days leading up to Christmas and the day after, and some traders "will try to pick up on some of these statistical tendencies to try and pick up a few pennies here and there," said Arlan Suderman, analyst for Farm Futures.
Some analysts said China's reported purchase of 20 million metric tonnes of corn was likely supportive, although not a clear factor in Monday's trade. Analysts questioned its long-term impact.
"It seems like the higher Chinese market is what gave it its support on the open," said Chad Henderson, analyst for Prime Ag Consultants. "But when the dust settles on it all, it just looks like they're trying to support their domestic prices. It does nothing to alleviate the glut of grain on the world market."
After climbing US$1 from its recent low, lingering weak demand has kept corn from climbing any higher, analysts added. Demand in exports, ethanol and feed is all weak, they said.
You have the corn farmers saying 'man, I don't want to give my corn away at US$3.50 cash,' and you've got the hog farmers saying 'look, I'm losing money on US$3.50 corn,'" Henderson said.
Volume is expected to be light all week because of the Christmas holiday.
The trade continues to eye weather in South America, which some analysts say is supportive because of dry crops. Others say the region appears to be getting enough rain.
CBOT oats futures ended flat. March oats closed at US$2.19 per bushel and May oats closed at US$2.28.
Ethanol futures were lower. January ethanol ended down US$0.011 to US$1.559 per gallon and March ethanol ended down US$0.010 to US$1.570.