December 2, 2008
CBOT Corn Review on Monday: Retreats; outside market factors influence
Corn futures on the Chicago Board of Trade retreated Monday, succumbing to speculative selling as bearish outside indicators sent negative waves filtering through the market.
December corn ended down 16 3/4 cents to US$3.32 3/4 per bushel. March corn ended down 17 cents to US$3.48 3/4 per bushel.
The market is not trading on its own fundamentals, and in the absence of fresh directional news falling financial and commodity markets easily uncovered selling interest, a CBOT floor analyst said.
The deleveraging of long positions in the market as well as the reestablishment of shorts in the market following end of the month and pre-holiday position evening last week were featured attractions, analysts said.
A quiet news front kept traders eyeing outside the market and, with troubles in the ethanol industry and global economic woes potentially damping demand, kept sellers in command.
Meanwhile, improved soil moisture in dry areas of Argentina's crop belt helped promote a defensive tonnee as well, traders added.
The DTN Meteorlogix weather forecast said in the main crop areas of South America, soil moisture supplies are mixed. Central Argentina's soil moisture supply is much improved after rain in the past two weeks. During this week, mainly dry conditions are on tap for Argentina. The dry weather in Argentina will have little effect due to the recent rains, Meteorlogix said.
U.S. Department of Agriculture reported corn inspected for export in the weekend November 27 totaled 32.580 million bushels, over pre-report analyst estimates that range from 20 million to 26 million. Despite the higher figure, analysts said figure failed to alter market sentiment, as the export pace remains 37.6% behind the pace at the same time last year.
In pit trades, speculative fund selling was estimated at 6,000 lots.
CBOT oat futures finished slightly higher. December oats rose 1/2 cent to US$2.02 a bushel, and March oats gained 1/2 cent to US$2.17 1/2.
Ethanol futures closed lower. December ethanol dropped 5.9 cents to 1.596 per gallon, and January ethanol lost 4.8 cents to 1.585.