Profit-taking tips corn lower
It didn't take long for profit-taking to trim the gains fueled by this morning's move by the Federal Reserve to lower a key interest rate.
Traders knocked the grains off morning highs in taking profits, sending corn into the red amid a stumble in the crude oil market and lagging export demand. At mid-day, December corn is 1/4 cent lower at $5.97 3/4, January soybeans are 8 cents higher at $11.33 and wheat is 1 1/4 cents higher at $5.95 3/4, according to Barchart.com.
Sellers sprung to action after this morning's rally based on the Fed interest rate reduction. Now, traders say lingering worries about slow export sales, South American crop conditions and the continued EU debt situation have the grains wavering after 2-plus days of gains. And as for that Fed rate cut, some traders say it can't be deemed a success until later on, when "real sustainable growth" can be seen.
"Seems like a last ditch desperation play to avoid a meltdown. In any event, I think that if this does not work I am not sure we have anymore arrows left in the quiver to sling at this thing," says ICAP Energy LLC Derivatives Manager Scott Shellady. Inflation is bad, but deflation is worse and driving rates to zero with a prevailing mentality that things will just get cheaper is a scary prospect if we do not start to see real sustainable growth."