October 28, 2008
CBOT Corn Review on Monday: Climbs on end-users, US stocks support
End-user buying and some guarded bullish optimism pushed Chicago Board of Trade corn futures higher Monday, analysts said.
December corn ended up 12 1/4 cents to US$3.85 1/4 per bushel and March corn ended up 13 1/2 cents to US$4.02 1/4.
The market rode spillover support from a climb in the U.S. stock market, but also showed signs of its own strength, analysts said. Traders were encouraged by activity overnight, when corn had limited losses despite plunging international markets and crude oil, an analyst said.
"Perhaps, maybe, we're starting to distance ourselves, or at least trying to get our own fundamental legs under us," said John Kleist, broker/analyst with Allendale in McHenry, Ill.
The fact that corn and soybeans have been trying to push higher despite a stronger dollar shows "cautious optimism" about the markets, said Arlan Suderman, analyst with Farm Futures. End-users are starting to buy, he added.
"They sense we may be near a bottom, and if we're not at the bottom we're close enough where it warrants getting some coverage," Suderman said.
Suderman noted that although prices dipped below the previous October low of US$3.71 in overnight trading, prices stayed above that mark throughout Monday's session.
The market has been oversold and due to rally, a floor analyst said, but has been stymied by outside markets. A return to bearish outside markets would bring a quick halt to any upside momentum, he added.
Harvest delays and harsh weekend weather were considered supportive Monday. High winds exceeding 50 miles per hour in parts of the U.S. corn belt likely knocked down some corn, making harvesting more difficult, analysts said.
Speculative buying also boosted the market, an analyst said. Funds bought an estimated 5,000 contracts.
Although end-user buying is seen picking up, weak demand has continued to weigh on the market. The U.S. Department of Agriculture on Monday reported grain inspections of 21.2 million bushels, down from 30.0 million the previous week and below analyst expectations of 28 to 33 million bushels.
CBOT oats futures ended lower. December oats ended down 12 cents to US$2.38 per bushel and March oats ended down 12 cents to US$2.55 1/2.
Ethanol futures ended higher. December ethanol ended up US$0.038 to US$1.690 per gallon and January ethanol ended up US$0.038 to US$1.702.