October 15, 2008

 

CBOT Corn Review on Tuesday: Gains erased on outside market pressure

 

 

In the final minutes of Tuesday's trading session, Chicago Board of Trade corn futures lost the modest gains maintained throughout the day.

 

Corn succumbed to pressure from weakening equities markets and crude oil atop a strengthening dollar, traders said. The most-active December corn slipped 1/4 cent to settle at US$4.11 1/4 a bushel, off the day's high of US$4.23 1/2. March corn dropped 1/2 cent a bushel to close at US$4.29.

 

"There's still a lot of deleveraging going on in the commodities world," a CBOT floor trader said. "We're pretty much moving tick-for-tick with crude oil and the stocks."

 

Corn showed more strength than neighboring markets. Nearby CBOT wheat and soybean contracts posted double-digit losses for the day.

 

"We hit corn at the close yesterday and brought it back today; there are signs people want to buy on weakness," the trader said.

 

Commercial users may begin layering some grain purchases over the next few weeks, but they won't be terribly aggressive about it until the market proves it has hit its lows, said Dale Durchholz, senior market analyst at AgriVisor.

 

The Dow Jones Industrial Average, which lacked clear direction through the day, lost nearly 300 points before grain trading closed Tuesday.

 

Traders said they expected about 22%-30% 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.

 

Weekly grain inspections for corn totaled 29.132 million bushels for the week ending Oct. 9, down from 36.264 the week prior. Corn export inspections for the marketing year are down 25% from the year prior.

 

Speculative funds bought an estimated 3,000 corn contracts.

 

In other markets, CBOT Dec. oat futures dropped 1 cent to close at US$2.92 a bushel.

 

Ethanol futures also saw gains with the nearby December ethanol contract closing US$0.008 higher at US$1.781 per gallon.

 

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