Corn Rebounds Amid Lack of Farmers Sales

CHICAGO (Dow Jones)-- U.S. grain and soybean futures ended higher Tuesday, as
a lack of farmer selling helped corn rebound from multi-month lows.
  Corn for December delivery at the Chicago Board of Trade ended up 5 cents to
$5.85 1/4 per bushel, up from an early low of $5.70, which was the lowest price
for front-month corn in a year.
  March corn, the most-active contract, also ended up, rebounding from 9-month
lows early in the session to close up 5 1/2 cents to $5.96 1/2.
  Traders said corn led the way higher, as the market shook off the early
losses, which were fueled by persistently sluggish export demand. The higher
close staves off what traders said would have been a negative close technically,
one that would have likely prompted trend-followers to sell.
  A lack of farmer selling has underpinned the market, and the downturn in
futures hasn't prompted them to release supplies.
  "Basis is tight and farmers aren't selling a lot of corn, suggesting it's not
there," says Joel Karlin of Western Milling. Basis is the difference between
cash market and futures prices.
  Other analysts said that farmers do have grain to sell, but that after making
strong profits this year as grain prices soared, they have the luxury of holding
on to the grain and waiting for prices to rebound in the new year.
  Regardless of what happens over the next few months, corn supplies are going
to remain tight in 2012, domestically and globally, added Shawn McCambridge,
senior grains analyst for Prudential Bache.
  But lackluster export sales have cast a negative tone over the market in
recent weeks. A large purchase of European corn by Japan, which typically relies
on U.S. supplies, highlighted those concerns Tuesday.
  "We [the U.S.] just don't have our traditional export customers. If we're more
expensive, they're going to head down the road," said Chad Henderson, an analyst
with Prime Ag Consultants, a Wisconsin brokerage.
  Soybean and wheat futures joined in the rally Tuesday. CBOT soy for January
delivery ended up 3 1/4 cents at $11.29 1/2 a bushel
  Uncertainty about the soy crop in South America, where forecasts are lacking
rain, is also underpinning prices, although some traders are dismissive of those
concerns. Forecasts call for mostly dry weather across key growing regions over
the next several days.
  "There's been more talk this week of South American weather turning drier, but
it's just talk," Tim Hannagan of PFG Best said in a report to clients.
  December CBOT wheat ended flat at $5.98 3/4 while other contracts closed
higher. December wheat at the Kansas City Board of Trade ended up 1/2 cent to
$6.67 and Minneapolis Grain Exchange December wheat closed up 6 cents to $8.54
1/4.
Other Markets
  U.S. rice futures closed higher, rebounding from a recent slump as firmer cash
prices underpinned the market.
  Rice futures, which have tumbled throughout the fall, are cheap compared to
cash prices, said Price Futures Group Vice President Jack Scoville. "The cash
market is pretty dead, but it's quoted higher" he said.
  CBOT January rice closed up 21c at $14.59 1/2 per hundredweight.
  CBOT oats futures end mostly lower. Front-month December oats ended flat at $3
a bushel while most-active March oats settled down 3 1/4 cents to $3.03 3/4.
  Ethanol futures were mixed, with January ethanol ending down $0.023, or 1%, to
$2.181 per gallon. Some deferred contracts were higher.