December 3, 2008
CBOT Corn Review on Tuesday: Drifts lower in consolidative action
Chicago Board of Trade corn futures ended modestly lower Tuesday, managing to consolidate in quiet trade following Monday's sharp declines.
December corn ended down 1/4 cent at US$3.32 1/2 per bushel March corn ended down 1/2 cent to US$3.48 1/4 per bushel.
The market managed to hold steady, taking a consolidative stance after plunging to new contract lows Monday, analysts said.
There were no serious moves to the upside in outside markets, and with Monday's slide taking the wind out of bullish sails, cautious activity prevailed, analysts added.
Nevertheless, futures are still faced with bearish fundamentals, as lagging export demand amid increased competition from feed wheat and uncertain corn ethanol demand keeping pressure on prices, traders said.
Improved soil moisture in Argentina and weakness in crude and soybeans applied pressure, but fresh export demand and ideas Monday's losses were overdone was enough to support and limit price moves.
A technical analyst said prices remain mired in a five-month-old downtrend on the daily bar chart, from the late-June contract high of US$8.16 a bushel. The next downside price objective for the corn bears is pushing and closing March corn futures below solid longer-term technical support at the US$3.25 level.
The U.S. Department of Agriculture announced Tuesday private export sales of 330,000 metric tonnes of U.S. corn for delivery to Mexico. Of that total, 210,000 tonnes are for delivery in the 2008-09 marketing year and 120,000 tonnes are for delivery in the 2009-10 marketing year.
The DTN Meteorlogix weather forecast said rain and storms in Argentina late last week and early in the weekend greatly improved soil moisture and eases stress to crops, especially after recent very hot weather. However, it now looks to be drier again during the next week or so.
In pit trades, speculative fund buying was estimated at 1,000 lots.
CBOT oat futures closed higher, extending modest gains from Monday. December oats gained 4 1/2 cents to US$2.06 1/2 per bushel, and March oats rose 4 1/2 cents to US$2.22.
Ethanol futures slipped. December ethanol shed 2.6 cents to US$1.57 per gallon, and January ethanol lost 2.8 cents to close at US$1.557.