CBOT Corn Review on Wednesday: Dips as short covering rally fizzles

  

 

December corn ended down 3 1/2 cents to US$4.84 per bushel and March corn ended down 3 1/2 cents to US$5.03.

 

A trader said the late plunge was due to "more liquidation, maybe even new shorts at the start of the month." Prices had been several cents higher with less than a half-hour left in the session.

 

"You had your bounce on oversold conditions," a trader said. "But big-picture, nothing has changed."

 

Global financial turmoil and weak demand weighed on the market, traders and analysts said. With the U.S. Senate scheduled to vote Wednesday evening, there was some optimism that the government would pass a bailout package. But traders said the economy would remain troubled and worldwide demand likely to remain sluggish.

 

Tuesday's U.S. Department of Agriculture quarterly grain stocks report, which boosted fourth-quarter grain stocks by 48 million bushels, is also weighing on the market, traders said.

 

Weather was another bearish factor, as forecast lacks any significant frost threat, analysts said. The crop is all but free from concerns that a frost would decimate a late-planted crop, analysts said.

 

Prices were higher for much of the day in a "relief rally" based on ideas the market was oversold. A trader said a "wall of worry" about end-of-quarter selling was out of the way now that September was over.

 

"The market has taken a tremendous beating, and now it's trying to find its legs," said John Kleist, broker/analyst with Allendale in McHenry, Ill.

 

The market retains downside technical momentum after falling about 60 cents this week, traders said.

 

CBOT oats futures ended higher. A trader said the market has outperformed the rest of the trading floor this week, although that could change as Canadian producers turn their attention from harvesting to merchandising. December oats ended up 5 1/2 cents to US$3.21 1/2 per bushel and March oats ended up 5 1/2 cents to US$3.38 3/4.