Corn futures at the Chicago Board of Trade closed lower on Thursday in a cautious technical slide with long liquidation by speculators the key feature, traders said. Traders said funds sold 5,000 lots and sell-stops were hit when the May contract broke below $4.03 and again at $4.00 per bushel.
CBOT corn closed unchanged to 7 cents per bushel lower, with May down 7 at $3.97-3/4. Volume was estimated by the CBOT at 211,105 corn futures and 81,286 options. "I think people are a little shook up and trading cautiously after what happened in the outside markets and I think they will remain cautious until the outside markets are a little more stable," said Shawn McCambridge, analyst for Prudential Financial.
Corn futures have slid more than 8-1/2 percent from their 10-year peak set in late February, in step with a sharp 6 percent drop in the US stock market which set a record high also in late February. "Most of the moves are on the screens now, following the outsides," a corn trader said.
The US stock market was flat to firm when grains closed, gold was higher but crude oil was falling. Corn is being viewed as a key player in the energy market now because of the growing usage of corn in the surging ethanol industry. There was nothing in the export arena overnight or early Thursday to give corn futures an added lift.
USDA early Thursday said 787,700 tonnes of corn were sold for export last week, below estimates for 900,000 to 1 million tonnes. Crop weather continues to be viewed as crop-friendly and therefore bearish for corn futures. Overall abundant winter precipitation in the US Midwest has buoyed soil moisture reserves which will benefit the soon-to-be-seeded corn and soy crops.
US government forecasters said early Thursday that above-normal temperatures were likely across much of the United States through June, a scenario that would be conducive to rapid seedings and growth of the 2007 US corn crop.
Technical traders were watching the May contract trade between key support at its 100 day moving average of $3.93-1/4 and key resistance is at its 50-day MA of $4.13. The nine-day relative strength index closed on Thursday at 27, just below the benchmark 30 that traders view as an oversold mark. Oat futures closed 2 to 5-1/2 cents per bushel higher, with May up 5-1/2 at $2.70 per bushel. Oats volume was estimated at 2,975 futures and 27 options.
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