December 10, 2008


CBOT Corn Review on Tuesday: Down slightly; pre-report consolidation



CBOT corn futures dipped slightly Tuesday, closing lower on outside market pressure and light profit-taking following Monday's strong gains, traders said. December corn ended down 2 cents to US$3.12 1/4 per bushel, March corn ended down 2 1/4 cents to US$3.27 3/4 and May corn lost 2 cents to US$3.38 1/2.


The market consolidated following sharp losses Thursday and Friday and strong gains Monday, said Dave Marshall, independent advisor and commodities broker in Nashville, Ill.


He said it would be difficult for the market to maintain any gains leading into Thursday's U.S. Department of Agriculture report, which is expected to reflect increased demand. The report will be released Thursday at 8:30 a.m. EST.


Prices had climbed a few cents earlier in the day, but retreated on pressure from soybeans, crude oil and equities, a trader said. The dollar, which had been weaker earlier in the day, strengthened late, contributing to corn's retreat.


A trader noted that back months showed more strength based on ideas that corn will need stronger prices to maintain acreage next year.


"But you've got a long way to go to get to that point," the trader said.


The trade is expecting ending stocks will climb in Thursday's supply and demand report from the USDA. Analysts expect, on average, that 2008-09 ending stocks will be pegged at 1.232 billion bushels, up from the U.S. Department of Agriculture's November estimate of 1.124 billion bushels. The estimates range from 1.124 billion to 1.400 billion bushels.


A floor trader said an increase in ending stocks has already been priced in, and that an increase of 100 million or 200 million bushels would have no effect on the market.


Demand is limiting any upside potential, analysts say, as demand for feed, ethanol and exports are all weak, analysts said.


CBOT oats futures ended unchanged. December oats closed at US$1.93 1/2 and March oats settled at US$2.08 per bushel.


Ethanol futures were slightly lower. January ethanol ended down US$0.012 to US$1.456 per gallon and March ethanol ended down US$0.002 to US$1.468.


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