CBOT Corn Review: Ends Lower On Dollar, Weak Demand
11/19/2009 02:47PM
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CHICAGO (Dow Jones)--Chicago Board of Trade corn futures ended lower Thursday on pressure from a stronger dollar, weaker crude oil and poor demand.
December corn ended down 3 cents to $3.95 per bushel and March corn ended down 3 cents to $4.10 3/4.
The market dipped despite gains in soybeans, which surged amid strong demand. By contrast, traders and analysts used a variety of pejoratives in describing export demand for corn, which barely topped 350,000 metric tons in the most recent week, reported Thursday morning.
Most traders and analysts say the market depends on outside investor interest for gains at this point. But funds sold an estimated 5,000 contracts Thursday.
"It is very difficult with current fundamentals to justify $4-plus spot corn, and $5.75 or $6 wheat, and above $10 beans," said Chad Henderson, analyst with Prime Ag Consultants. "That's very difficult to do."
Jerry Gidel, analyst with North American Risk Management services, said the market appeared to follow the dollar throughout the day.
With December options expiration Friday, the market could drift toward strike prices at $3.90 or $4, analysts say.
"I think tomorrow [Friday] you'll see a nickel move in either direction and sit at one of those strike prices," Henderson said.
In addition to the stronger dollar, a sharp drop in crude-oil prices was also bearish for corn. The two markets are tied because of corn's role in ethanol.
Views on harvest progress and its effect on the market are mixed. Wet weather expected next week should keep harvest progress slow, but enough work has gotten done recently to pressure the market, according to some traders.
A trader said that, technically, the market is looking weaker after failing to test its recent high this week. But traders also note that the market's late-week stumble is merely following the trend from the past couple weeks, when prices surged early but started to retreat on Wednesday.
CBOT oats futures ended flat. The December contract settled at $2.59 1/2 per bushel and March oats closed at $2.73.
Ethanol futures were virtually unchanged. December ethanol ended up $0.001 to $2.121 per gallon and January ethanol ended down $0.003 to $2.006.
-By Ian Berry, Dow Jones Newswires; 312-341-5778; ian.berry@dowjones.com