December 25, 2008
CBOT Corn Review on Wednesday: Climbs on technical momentum, soybean strength
Chicago Board of Trade corn futures climbed for the third straight day Wednesday, rising technical support and strength from soybeans amid light trade, analysts said.
March corn ended up 3 1/4 cents to US$3.98 per bushel, May corn ended up 3 cents to US$4.08, and July corn ended up 2 3/4 cents to US$4.18.
The nearby March contract has gained 17 1/4 cents this week, although the rally has come amid very thin trading ahead of the Christmas holiday, and analysts said its unclear whether those gains will hold when traders return. The market will be closed Thursday.
Weak demand and psychological resistance at US$4 is limiting gains, traders said. Corn is up more than US$1 from its lows earlier this month, and analysts said the market will be unable to sustain a continued rally unless demand picks up.
The rally itself will hurt demand, analysts add. Rising corn prices, even as crude oil has dropped, is hurting ethanol in particular, they said.
But corn is in a strong technical position, having closed above its 50-day moving average for the second day in a row.
Corn continues to show strength even when crude oil drops, a trader noted.
The market has support from soybeans, which posted strong gains again Wednesday. Soybeans' climb is supportive because corn needs to keep up in order to maintain acreage for next year, analysts said.
Weather in South America is also seen as supportive, with analysts noting forecasts calling for more dry weather in Argentina.
CBOT oats futures ended higher. March oats ended up 3 3/4 cents to US$2.18 3/4 and May oats ended up 3 3/4 cents to US$2.27 3/4 per bushel.
Ethanol futures ended higher. January ethanol ended up US$0.021 to US$1.615 per gallon.