November 12, 2009

 

CBOT Corn Review on Wednesday: Ends mixed; unable to hold above US$4

 

 

Chicago Board of Trade corn ended mixed Wednesday in a day of choppy trading as outside money flow plays a key role in the market, traders said.

 

December corn ended down 1/2 cent to US$3.94 per bushel and March corn was up 1/4 cent to US$4.09 1/4.

 

The market swung back and forth throughout the session amid a lack of compelling fundamental news. Jerry Gidel, analyst with North America Risk Management Services, said producer selling helped erase gains after the market climbed above US$4 in early trade.

 

He described the market as "skittish as the infamous cat on the hot tin roof."

 

The market was seen as technically strong, but it was unable to maintain the early gains above US$4, which serves as strong resistance.

 

Farm Futures said in a commentary that US$4 is "simply too tempting for farmers behind in their cash corn marketing this year, especially those harvesting lower-quality corn that may not store as well this winter."

 

A firming up of the dollar helped weigh down prices after the early gains, although analysts said the action throughout the day did not seem particularly tied to the outside markets.

 

Jason Britt, president of Central State Commodities, adds that while some saw Tuesday's USDA report as friendly, the projected 1.625 billion bushel carryout is not bullish.

 

"Do you really want to start loading your boat at US$4 with a carryout like that?" Britt says.

 

Views of weather forecasts and the slow-but-picking-up-speed harvest are mixed. The dry weather has allowed for harvest progress, but wet weather this weekend and early into next week could stall harvest for a few days, according to analysts.

 

Despite the recent upside momentum, Britt said that the market needs to start closing above US$4 to show significant technical strength.

 

CBOT oats futures ended higher Wednesday. December oats were up 2 3/4 cents to US$2.66 1/2 per bushel and March oats were up 2 3/4 cents to US$2.80.

 

Ethanol futures were higher. December ethanol ended up US$0.031 to US$1.975 per gallon and January ethanol ended up US$0.017 to US$1.894.