October 14, 2008

 

CBOT Corn Review on Monday: Modest gains stick on outside markets strength

 

 

Chicago Board of Trade corn futures maintained small gains on Monday as outside markets rebounded from historic sell-offs the previous week.

 

The most-active December corn gained 3 1/4 cents to settle at US$4.11 1/2 a bushel, off the day's high of US$4.22 1/2. March corn gained 3 3/4 cents a bushel to close at US$4.40.

 

Corn generally followed outside markets higher - the Dow Jones Industrial Average gained more than 600 points when grain trading closed Monday. Crude oil moved higher, while the dollar stayed weaker.

 

"We were following outside markets with mostly light volume because of the holiday and coming back from last week's bloodbath - there was huge deleveraging last week," a CBOT floor trader said.

 

"Farmers aren't moving anything - they aren't selling anything and they are not buying any inputs," said Jay Fitzgerald, an Advance Trading broker.

 

While harvest-time selling pressure isn't expected to weigh prices down much further, it "could help strain the recovery," a trader said.

 

Traders said they expected about 20% of the nation's corn crop to be harvested when the U.S. Department of Agriculture releases its weekly crop progress report at 4 p.m. EDT Tuesday. The report, usually released Monday, is delayed due to the federal Columbus Day holiday.

 

"It's not an ultra bullish upside market; we rebounded a little to cure the oversold positions," a trader said.

 

Speculative funds bought an estimated 4,000 corn contracts.

 

In other markets, CBOT December oat futures closed 14 1/2 cents higher at US$2.93 a bushel.

 

Ethanol futures also saw gains, with the nearby December ethanol contract closed US$0.082 cents higher at US$1.773 a gallon.