September 11, 2008


CBOT Corn Review on Wednesday: Falls on continued outside pressure



Pressure from outside market weakness and speculative selling drove Chicago Board of Trade corn futures lower Wednesday.


September corn ended down 7 cents to US$5.22 1/2, December corn ended down 7 3/4 cents to US$5.36 3/4 and March corn ended down to 7 3/4 cents US$5.55 3/4.


The market had little of its own news, traders said, and succumbed to pressure from crude oil and the dollar. A trader said speculative selling continues to weigh on corn and other commodities.


"It's a money game yet, and the market is not yet focused on long-term corn fundamentals," said Arlan Suderman, analyst for Farm Futures. That's "not saying we should be at US$8 by any means."


Traders expecting follow-through from Tuesday, when the market showed late strength, were disappointed.


"You have a one-day bounce on this thing, and you continue back down," a trader said.


The December contract price has dropped from an intraday high of US$6.23 per bushel on Aug. 25. Prices on Wednesday did not approach Tuesday's intraday low of US$5.31 1/2.


Weather was seen having a limited influence on the market, with long-range forecasts calling for a potential frost late next week still uncertain. Rainfall from Hurricane Ike expected to hit the corn belt could also help the crop, an analyst said.


The trade is looking ahead to Friday's crop production report from the U.S. Department of Agriculture. Analysts surveyed by Dow Jones expect on average that the USDA will drop projected corn yield to 153.3 bushels per acre, down from 155 bushels in the August report, and cut total production to 12.152 billion bushels, down from 12.288 billion.


New-crop ending stocks are also projected to shrink, analysts estimate.


The estimates are the results of a Dow Jones Newswires survey of 21 analysts. The USDA is scheduled to release its updated estimates Friday at 8:30 a.m. EDT.


Many traders and analysts say the report will be far from the final word on the crop, and that it could be October or later before a true picture emerges.


CBOT oats futures ended lower. September oats were down 2 1/2 cents to US$3.24 1/2 per bushel, December oats were down 2 1/2 cents to US$3.37 1/2 and March oats ended down 2 1/2 cents to US$3.55.


Ethanol futures ended lower. December ethanol was down US$0.015 to US$2.150 per gallon and January ethanol was down US$0.005 to US$2.155.


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