September 24, 2008
CBOT Corn Review on Tuesday: Up slightly on technical, spillover support
Chicago Board of Trade corn futures ended slightly higher Tuesday on spillover support from wheat and technical support amid cautious trade, traders said.
December corn ended up 1 3/4 cents to US$5.60 1/4 per bushel and March corn ended up 1 3/4 cents to US$5.78.
Prices were slightly lower for most of the day before inching higher late in the session. A rally in wheat provided support for corn, which appears to have found its own support around US$5.50 in the December contract, a trader said.
The market doesn't have strong fundamental support, and trade was cautious Tuesday as traders kept an eye on the day's congressional hearings on the government's proposed bailout plan.
A trader said that if stocks start plunging again, "they'll take the grains and everything else with it. We're a nervous market right now."
Corn has been unable to sustain rallies for weeks, and open interest has consistently dropped amid widespread commodity bearishness.
"What still concerns me is we have not built any open interest on the rallies," said Dave Marshall, an independent marketing advisor and commodities broker in Nashville, Ill.
Profit-taking contributed to corn's weaker stance for much of the day, Marshall said. A modest rebound in the dollar and a dip in crude oil also pressured the market, traders said.
A trader said that corn could climb another 10 or 15 cents if it manages to break through this week's high of US$5.64 1/2 in the December contract.
Traders agree fundamentals are a minor factor in the market right now. Some said good weather is helping the crop and weighing on the market along with weak demand, while others said the threat of a frost and likelihood of further reductions in government production estimates are bullish.
Marshall said that with the end of the quarter and the month approaching, the market could come under continued pressure if index funds decide to increase liquidation.
CBOT oats futures ended slightly higher. December oats were up 2 cents to US$3.43 per bushel and March oats were up 1 1/2 cents to US$3.60.
Ethanol futures ended lower. December ethanol ended down US$0.020 to US$2.245 per gallon and January ethanol ended down US$0.010 to US$2.259.