Monday January 25th, 2010

Corn prices rose on quiet trading today, led by metal and energy contracts. Soybeans continued to retreat on concerns about oversupply. Traders said there was little fundamental reason for the market to climb, and little expectation that Monday's gains would be the start of an extended rally. A few said the market was merely oversold. But traders also said there were signs that after falling roughly 60 cents the past couple of weeks, the market is at a point where further significant losses are unlikely, at least in the short-term.

Soybean futures backpedaled Monday, dropping to 3 1/2- month lows on bearish South American crop outlooks and technical selling. The prospect of record South American crops following bumper U.S. production in 2009 kept prices lower in the absence of fresh news to buoy prices, analysts said. The potential for big crops in Brazil and Argentina managed to trump any need for a technical correction, despite concerns that the market’s 11% drop in prices in the last two weeks had left futures oversold. In the absence of fresh supportive news, the path of least resistance remained lower, as a lack of new export news and a lack of definitive support from outside markets, left market bulls without any good buy signals.