20000216

CBOT corn ends firm as weather jitters persist

CHICAGO: Corn futures at the Chicago Board of Trade were higher early Monday, supported by lower than expected rains in South America over the weekend and longer-term concerns over dryness in the United States, traders said.

Corn closed 1/2 to 1-1/4 cents higher with March up 1/2 at $2.22-1/4.

"I suppose you could say it's weather, and the funds stay long in anticipation of a weather scare this summer," a trader said.

Wheat acreage in the central and southern U.S. Plains has suffered from below-normal precipitation since the crop was seeded last fall, and forecasts for this week were generally dry.

Traders said dryness in the central United States could become an increasing concern for U.S. corn and soybean markets the longer it persists in the weeks leading up to the spring planting season. Gains in were limited by continued export competition from China and large U.S. stocks. The U.S. Agriculture Department, in monthly supply and demand reports Friday, hiked its projection for 1999/2000 Chinese corn exports to 8 million tonnes, compared to a previous estimate of 5 million and 1998/99 exports of 3.34 million.

In export news overnight, traders said Taiwan's Members Feed Industry Group will tender Tuesday for 56,000 tonnes of U.S. corn.

The latest Commitments of Traders reports from the Commodity Futures Trading Commission indicated that speculative commodity funds continued to hold a large net long position in the corn futures market, traders said.

The CFTC said that as of Feb. 8, noncommercial interests, which are primarily funds, held 125,701 long corn futures contracts and 20,401 shorts, for a net long of 105,300 contracts. As of Jan. 25, the net noncommercial long was 109,482.

Cargill Investor Services bought 300 July, E.D. & F. Man International bought 400 March, TENCO Commercial Grain bought 200 March, 200 May and 300 July, Cargill sold 200 March, 200 May and 200 July and Goldenberg Hehmeyer sold 500 July.

Corn futures volume was estimated by the CBOT at 55,000 lots, below the 74,349 lots traded Friday.

Corn options volume was estimated at 15,000 lots.-Reuters