November 14, 2008
CBOT Corn Review on Thursday: Climbs amid choppy trade, outside support
Chicago Board of Trade corn futures settled higher Thursday after a day of vacillating prices due to outside market influences.
December corn ended up 7 1/2 cents to US$3.77 per bushel, March corn ended up 7 1/4 cents to US$3.93 1/2.
Prices swung back-and-forth throughout the day. A rebound in U.S. stocks, along with crude oil, pushed corn higher near the end of the session, traders said.
"It looked like everything was going to hell in a handbasket, then boom, everything turned," a trader said.
Despite the higher close, traders said there is little enthusiasm among buyers and rallies remain tepid.
"Buyers are very scarce, and what buyers there are, they are very weak longs," said Mike Zuzolo, senior analyst for Risk Management Commodities.
End-users remain content to stay on the sidelines, waiting for the market to drop even further, rather than buying now at prices that are already more than 50% off their record highs from earlier this year, analysts said.
Traders said there are lingering concerns about more fund liquidation this week. Fund selling has been a key factor in driving down commodity prices in recent weeks.
"I think we have a while to go yet," a trader said.
Equities have also played a key role in the movement of corn and other commodities in recent weeks. U.S. stocks have mostly dropped, fueling concerns about a worldwide recession, and an accompanying plunge in demand.
Long-term, the market remains in a downward trend, traders said, although short-term, the market could have a little upside technical momentum after failing to break below Tuesdays low. Corns inability to climb past resistance at US$3.80 earlier in the day prompted more selling, Zuzolo said.
Weather is seen as supportive, with more wet weather expected to slow harvest progress in parts of the U.S. corn belt.
Unwinding of corn-soybean spreads was seen as a factor early in the session, when soybeans climbed while corn fell.
CBOT oats futures ended lower. A trader said volume was light except for spread trading, which dominated Thursdays action. December oats ended down 4 cents to US$2.26 per bushel and March oats ended down 4 cents to US$2.42.
Ethanol futures ended higher. December ethanol ended up US$0.026 to US$1.648 per gallon and January ethanol ended up US$0.009 to US$1.635.