December 31, 2008
CBOT Corn Review on Tuesday: Strength found at end of mixed trade
Chicago Board of Trade corn futures finished a mixed-to-lower trade with modest gains Tuesday as traders squared positions ahead of the New Year.
March corn gained 2 3/4 cents to settle at US$3.96 1/4 a bushel, near the day's high of US$3.97 1/2. May corn added 2 1/2 cents a bushel to close at US$4.06 1/2 and July corn rose 2 3/4 cents to US$4.17.
Speculative funds activity in corn was seen as even, according to midday estimates.
Position-squaring is seen as the dominant force in the agricultural markets ahead of the New Year, analysts and traders said.
Aside from year-end evening, corn and wheat spreading continues, but both are riding soybean strength, noted Greg Wagner, an AgResource senior market analyst.
"It feels like corn wants to go lower, but it's broken 25-30 cents - that's probably enough for now," a CBOT floor trader said.
But with consolidation ahead of the New Year reallocations, the trader said he expects continued selling pressure Wednesday.
Looking to short-term technical negativity, corn "should hit its lows by February and then work higher," the trader said.
Thundershowers forecast for tonneight may provide localized benefit to Argentina, but dryness issues may become severe in the east shortly, said meteorologist Mike Tannura of T-Storm Weather.
Dryness is becoming intense with 3-inch (or greater) deficits over eastern states responsible for more than 20% of the country's corn production, he added.
"A few thunderstorms are probable tonneight and tomorrow, but heavy rain is not foreseen," Tannura said. "Additionally, dryness follows with another chance for rain not on the immediate horizon."
In other markets, CBOT March oat futures closed 7 cents lower at US$2.10 a bushel.
Ethanol futures closed even in the nearby January contract. March ethanol gained US$0.001 cent to US$1.619.