December 23, 2009

 

CBOT Corn Review on Tuesday: Ends slightly lower on dollar, soy

 

 

Chicago Board of Trade corn futures ended slightly lower Tuesday under pressure from a stronger U.S. dollar as the market continues to consolidate near US$4.

 

March corn ended down 1 1/4 cents to US$3.98 3/4 per bushel, and May corn ended down 1 1/2 cents to US$4.09 1/4.

 

The dollar was the dominant theme for corn and other commodities, analysts said, and its direction could be key to corn and other commodities into the new year. In addition to the dollar, soy fell by more than a dime.

 

Also, while the USDA announced export sales to Mexico Tuesday morning, overall demand remains weak, as demonstrated by low weekly export inspection numbers, analysts said. The U.S. Department of Agriculture reported weekly inspections of 17.765 million bushels, below the prior week's total of 29.569 million bushels and below trade estimates of 27 million to 33 million.

 

The market is hovering around US$4 and a series of key moving averages that have converged, including the 10-day, 20-day, 50-day and 200-day.

 

Overall the market is seen as being rangebound, with a couple analysts saying that prices between US$3.80 and US$4.20 serve as either end of the range.

 

Limiting the downside, a trader said, is index fund rebalancing expected at the start of the year. Some said it is already happening, and is supportive to corn.

 

The market also had underlying support from concerns about a snowstorm bearing down on the Midwest, which will halt the harvest, which is not yet finished. The U.S. Department of Agriculture will release updated harvest estimates in its weekly crop progress report at 4 p.m. EST.

 

CBOT oats futures ended slightly lower Tuesday. March oats ended down 1/2 cent to US$2.59 per gallon and May oats settled down 1/2 cent to US$2.67 1/4.

 

Ethanol futures were mixed. January ethanol ended up US$0.005 to US$1.846 per gallon and March ethanol ended down US$0.003 to US$1.822.