November 4, 2008


CBOT Corn Review on Monday: Climbs slightly amid mixed influences



Chicago Board of Trade corn futures ended slightly higher, as the high volatility of recent weeks was replaced by caution and consolidation, traders said.


December corn ended up 1 1/2 cents to US$4.03 per bushel, and March corn ended up 1 1/2 cents to US$4.20 3/4.


Corn opened higher and struggled to maintain its gains on a day with little outside direction, traders said. The December contract was as high as US$4.17 1/2 earlier in trading, although an analyst said that was due to "very thin" trade.


There wasn't much selling interest to drag the market lower, said Joel Karlin, analyst for Western Milling.


"There's a sense we're trying to bottom here," he said.


He added that the market is trying to divorce itself from outside markets. A stronger dollar and plunging crude oil have taken a chunk out of the price of corn and other grains in recent weeks.


Consolidation was a feature of the market a day ahead of the U.S. presidential elections, traders said. There were differing views on how the election would affect the markets. A couple of analysts said the election offered psychological support and a sense that things would return back to "normal" in a market that has swung wildly and dropped substantially in recent weeks.


News of VeraSun's filing for bankruptcy protection, announced late Friday, had little effect on the market, traders said, because it was common knowledge the ethanol producer was in trouble. A cash-connected floor trader noted that "their stock was 57 cents on Thursday."


"The ethanol industry in general, we know it's in trouble," another trader said.


Weather has been a bearish influence on the market in recent days, with warm, dry conditions that have been ideal for harvesting a crop that is behind schedule. Still, analysts note that rain is likely by the middle of the week in the U.S. corn belt.


Ethanol futures ended lower. December ethanol was down US$0.011 to US$1.739 per gallon and March ethanol ended down US$0.009 to US$1.746.


CBOT oats futures ended higher. December oats ended up 4 1/2 cents to US$2.36 per bushel and March oats ended up 4 1/2 cents to US$2.53 3/4. The market appears to be settling into a range, a trader said, between US$2.20 and US$2.70 to US$2.75 in December.


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