CBOT Corn Review: Ends Lower On Dollar, Quality Concerns
11/12/2009 03:10PM
Bookmark
Subscribe
CHICAGO (Dow Jones)--Chicago Board of Trade corn futures ended lower Thursday amid corn/soybean spread trading and concerns about the quality of the crop.
December corn ended down 3 1/2 cents to $3.90 1/2 per bushel, and March corn ended down 3 1/2 cents to $4.05 3/4.
The market struggled all day despite gains in soybeans and soymeal. Some traders attributed that to concerns about quality, specifically a rumor that vomitoxin found in distillers dried grain -- an ethanol byproduct used as livestock feed -- was going to lead to a shift in soymeal.
Analysts said that was a legitimate concern given the wet conditions this year, which are conducive to disease.
"Is it reason enough for all this [price movement]? Probably not," said a floor analyst.
Purdue University recently said high vomitoxin levels have been present in much of the Midwest, including Indiana, and that some pork producers using new crop corn have had "nearly 100 percent feed refusal because of the high vomitoxin levels in the corn."
Good harvest progress this week was also seen weighing on the market. The weather has been mostly dry recently, although forecasts call for more potential harvest delays early next week.
Analysts said the market's inability to hold above $4 has also prompted some selling. As was the case last week, corn surged the first couple days of the week but has since retreated.
Farmer selling has picked up on the rallies, analysts said, and basis, the difference between cash and futures prices, has weakened.
Outside macro markets were seen as a bearish factor Thursday, as the dollar gained while crude oil stumbled.
Corn faces strong resistance at $4, has support around $3.50, and has been prone to violent swings within the range, analysts say.
CBOT oats ended higher. December oats ended up 2 1/2 cents to $2.69 per bushel and March oats ended up 2 1/2 cents to $2.82 1/2.
Ethanol futures were lower. December ethanol ended down $0.006 to $1.969 per gallon and January ethanol ended down $0.013 to $1.881.
-By Ian Berry, Dow Jones Newswires; 312-341-5778; ian.berry@dowjones.com