December 10, 2009

 

CBOT Corn Review on Wednesday: Down slightly on soy; storm limits losses

 

 

A drop in soy sent Chicago Board of Trade corn futures lower Wednesday, although concerns about a nasty storm in the U.S. corn belt limited losses, traders said.

 

December corn ended down 1 1/2 cents to US$3.68 per bushel and March corn ended down 1 1/2 cents to US$3.83 1/2.

 

The market opened higher on concerns about the snowstorm, but retreated following losses in soy, traders said. Soy dropped more than 15 cents on the day.

 

Other outside markets, such as crude oil and wheat, were also lower.

 

A floor analyst said that concerns about the storm, which has dumped more than a foot of snow in some areas and has been followed by very high winds, kept corn from dropping further. The March contract dropped as low as US$3.79 during the session before rebounding.

 

Views of the effect of the storm on the market vary. Roger Elmore, corn specialist with Iowa State University, said both the snow and the wind could cause some corn to lodge, or fall down. The storm could also bring harvest to an end for those farmers who still have corn in the field, and crop losses are possible, he said.

 

"It's not a pretty picture when you've got corn in the field with a snowstorm like this," Elmore said.

 

But some traders say that will not be enough to rally a market suffering from weak fundamentals.

 

"It's tough to get a supply bull argument going when you're in a demand bear," said John Kleist, broker/analyst with Allendale.

 

A floor trader added commodities in general are struggling, and could continue to struggle as the dollar regains its footing.

 

"You tried to rally it in the corn, but the big money is going to the sidelines," he said.

 

The trade is awaiting Thursday's supply and demand report from the USDA, which will be released at 8:30 a.m. EST. Analysts on average are projecting a modest increase in 2009-10 ending stocks due to the weak demand.

 

CBOT oats futures ended slightly higher Wednesday. March oats ended up 1 1/2 cents to US$2.54 1/2 per bushel and May oats ended up US$1 1/2 cents to US$2.63.

 

Ethanol futures were lower. January ethanol ended down US$0.024 to US$1.945 per gallon and March ethanol ended down US$0.032 to US$1.848.