CHICAGO-(Dow Jones)--The bearish U.S. economic outlook battered corn futures Friday, sending the December contract below $3 for the first time since October 2006. Chicago Board of Trade December corn ended down 24 3/4 cents at $2.93 1/2 a bushel.Weak demand, and little hope that it will rebound soon, is driving corn lower, analysts said. The key piece of the puzzle for Friday's trade was payroll data.
The U.S. Labor Department reported a decline of 533,000 nonfarm payroll jobs in November, the largest decline in a single month since December 1974. Corn's close below $3 adds psychological pressure to the market, traders said. Prices are down from a high near $8 in late June, when many were predicting corn would climb even higher.
"Everyone was drinking the same Kool-Aid, and now they're spitting it out," said Joel Karlin, an analyst with Western Milling. Karlin said the only potentially bullish factor in the market is that it "may be difficult to get an increase in corn acreage" given current prices.
Other than that, there's little positive news, he said. Analysts say corn will continue to draw inspiration from other markets such as the stock market or crude oil futures in the near term.
Activity In Other Key Commodity Markets:
CRUDE OIL: Futures ended near a four-year low as economic data reinforced fears about shrinking oil demand. New York Mercantile Exchange January crude fell $2.86 to settle at $40.81 a barrel. Oil prices came within 25 cents of a four-year low, as the U.S. recession showed signs of deepening.
COPPER: The payroll data took a toll on copper futures as well, sending prices sliding more than 6%. March copper on the Comex division of Nymex fell 9.6 cents to settle at $1.3735 a pound. "This is really recessionary," said George Gero, vice president with RBC Capital Markets Global Futures, with regard to the payrolls data. "It does not look like you're going to be using copper for any infrastructure in the near term."
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