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CBOT corn ends lower on S. America weather and soy

CHICAGO: Corn futures at the Chicago Board of Trade closed lower Tuesday on an improved crop outlook in South America and a late break in soybean futures, traders said.

Bearish feedback on global demand also weighed on the market, but corn held firm relative to the soybean market, they said.

Corn closed unchanged to 1/2 cent per bushel lower, with March down 1/4 at $2.21-1/4.

"There was a little fund buying in corn that propped it a little relative to soybeans," said Vic Lespinasse, floor spokesman for A.G. Edwards. Scattered rains of 1/4 to 1 inch fell in Argentina's corn and soybean areas over the past 24 hours, Weather Services Corp. said Tuesday.

For the next five days, Weather Services projected scattered rains in Argentina's corn and soybean areas, with totals of 1/2 to 1 inch expected.

But the rains may not arrive soon enough to prevent harm to the corn crop in Argentina, which ranked among the top five corn producers in 1998/99 at 13.5 million tonnes, and ranked second in exports at 7.8 million tonnes. "Periods of hot, dry weather will impact corn in Argentina," Weather Services said in a report Tuesday. "Significant crop losses can be expected."

Export-related news overnight further underscored the upper hand that world corn buyers hold over sellers, traders said. Earlier Tuesday, the Korea Corn Processing Industry Association passed on tenders to buy 105,000 tonnes of corn from China, Argentina or the United States, citing high prices, traders said.

Traders said CBOT corn prices could be confined to a fairly tight range over the next few weeks as the market awaits further information on such factors as crop strength in South America, US farmer planting intentions and the US spring and summer weather outlook.

The $2.20 level in March futures was viewed as a key support area. "The market doesn't want to get too bearish under $2.20 and it doesn't want to get too bullish over $2.23," said Steve Bruce, a broker with E.D. & F. Man International at the CBOT.

E.D. & F. Man International bought 500 March, RJ O'Brien & Associates bought 400 July, Commercial Grain and O'Connor & Co. each sold 500 March and FIMAT Futures sold 500 March and bought 200 May. In spreading, Cargill Inc. bought 1,400 March and sold 1,400 May at a price difference of 8 cents.

Corn futures volume was estimated by the CBOT at 44,000 lots, below the 53,097 lots traded Monday.

Corn options volume was estimated at 12,000 lots.-Reuters