December 30, 2009
CBOT Corn Review on Tuesday: Rangebound market up slightly in sideways trade
Chicago Board of Trade corn futures ended slightly higher Tuesday, as the market remains confined in a broad range.
March corn ended up 1 cent at US$4.17 per bushel, and May corn ended up 1 cent at US$4.27.
The market was on both sides of unchanged during the session, and was firm late in the day despite strength in the dollar. But gains were subdued, and the March contract has been trading almost exclusively between US$3.80 and US$4.20 since mid-October.
"We're stuck there. That's all it comes down to," said Chad Henderson, analyst with Prime Ag Consultants.
The market was stuck between lower wheat and higher soy throughout the session, with some corn-soy spread trading noted.
Traders said there was position-squaring as December nears its close, and there continues to be speculation about index fund rebalancing.
Some traders said the rebalancing has already been taking place, although Henderson said that view isn't supported by the light volume trade recently.
Whether it happens, and to what extent, could determine corn's direction to start the new year, analysts said.
"I think everyone is going to be sitting there wondering, well, is this going to show up? What's going to happen here?" Henderson said.
Although there is little fresh news in the market, traders say corn does have support from concerns about the crop. Recent snows continue to stall the harvest, according to most analysts, heightening concerns about corn that could stay in the fields all winter and be vulnerable to yield losses.
Also, the cold weather throughout the U.S. Midwest is expected to boost demand, as shivering livestock have to consume more corn.
CBOT oats futures ended higher. March oats ended up 4 cents at US$2.69 per bushel, and May oats ended up 4 1/2 cents to US$2.77 3/4.
Ethanol futures were higher. January ethanol ended up US$0.007 at US$1.923 per gallon, and March ethanol ended up US$0.015 to US$1.897.
