CBOT Corn Review on Thursday: Tumbles on economy; down 16% on week
December corn ended down 30 cents to US$4.54 per bushel and March corn ended down 30 cents to US$4.73.
Corn dropped on a variety of concerns, mostly from outside influences, analysts said.
"A perfect storm for the bears. And down you go," said Vic Lespinasse, analyst for grainanalyst.com.
Among those concerns, he said, was whether the U.S. House would pass a proposed bailout package on the second attempt this week. Fears of a deep recession linger, and traders noted that it would weigh on the entire agricultural sector. The entire sector took "a thrashing," a trader said, noting that agriculture-related equities were also lower.
Index fund liquidation continues to be a force in the market, traders said.
Weather is non-threatening to the crop, Lespinasse added, and the market's downside momentum increased after it made new lows Thursday.
The December contract has dropped this week by 89 cents, or 16.4%. It is down from a high near US$8 in late June, and at its lowest point since late 2007.
"How low is low?" a trader asked.
"We were at the peak of the mountain, and now we're at the bottom of the friggin' valley in six months," he added.
Traders said it was unclear where the market would bottom, however. Joel Karlin, an analyst for Western Milling, said prices could fall as low as US$4.25. Analysts say corn will eventually climb again as the trade addresses the crop's need for more planted acres next year.
Karlin added that amid all the bearish economic worries, "it's not going to help that the dollar has staked out new highs." A higher dollar makes U.S. exports less attractive.
Feed demand has taken a tumble, analysts note, due to reduced hogs, poultry and cattle, and some producers' decisions to switch to wheat for feed.
Although they note reports are anecdotal, traders continue to talk of early yield numbers in parts of the U.S. corn belt coming in surprisingly high.
CBOT oats futures ended lower. December oats were down 6 cents to US$3.10 per bushel and March oats ended down 11 1/2 cents to US$3.27 1/4.
Ethanol futures "gave up the ghost" Thursday, in the words of one analyst. December ethanol tumbled US$0.108 to US$1.985 per gallon and January ethanol ended down US$0.119 to US$1.981.