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CBOT corn closes firm on short covering, soy gains

CHICAGO: Corn futures at the Chicago Board of Trade closed firm on Thursday on mild short covering after on Wednesday's sharp break in prices and on a late rally in soybean futures.

"On the fundamental side there was no change. It's pretty quiet, and I think the rains have been factored in the market," said Shawn McCambridge, analyst for Prudential Securities.

McCambridge and others said on Wednesday's sharp break in prices left the market open for a corrective bounce on Thursday.

Corn closed 1 to 2 cents per bushel higher with March up 1 at $2.16-1/4. May was up 1-1/2 at $2.24-3/4.

Light volume was noted with short covering tied to the gains, the traders said, and significant support was lacking because of widespread rains in the Midwest that should provide a moisture boost for parched soils, traders said.

Most of the Midwest should receive rainfall of at least 1/4 inch by the end of the week, meteorologists said. Over the past 24 hours, 1/4 to 3/4 inch of rain fell from western to central Iowa into Missouri, Weather Services Corp. said.

Much of the eastern Midwest should get 0.1 inch to 0.5 inch of rain on Thursday, and another 0.3 inch to 1 inch was likely for western and central areas on Friday, Weather Services said.

"Moisture in the Midwest has picked up, and there's a chance of more over the weekend," one CBOT broker said.

Below-normal precipitation through much of the fall and winter in the Midwest fostered growing concern as the spring corn and soybean planting season neared. But worries were easing in the wake of this week's moisture.

Overnight corn export activity was relatively modest. The Korea Corn Processing Industry Association bought 52,500 tonnes of US corn, traders said. But it passed on a tender to buy another 52,500 tonnes, citing high prices.

Taiwan's Major League Feed Group will tender on Friday for 56,000 tonnes of US corn, traders said on Thursday.

Technicals for CBOT corn have eroded in the wake of sharp losses this week, traders added. On Wednesday, May CBOT corn fell 4-3/4 cents to $2.23-1/4, the contract's lowest close since Jan. 12.

Heavy fund selling helped push May below several key chart moving averages on Wednesday, but the contract ended above the 50-day average, which was about $2.21-1/4 at on Wednesday's close.

At on Thursday's close there were at least 1,500 lots offered in the May at $2.25 a scenario that helped cap the late session rally.

Refco Inc. bought 200 March and 300 May, E.D. & F. Man bought 200 May and 400 on December, Goldenberg, Hehmeyer & Co. sold 2,000 on December and Carr Futures sold 1,400 May.

Corn futures volume was estimated by the CBOT at 100,000 lots, below the 123,211 lots traded on Wednesday.

Corn options volume was estimated at 20,000 lots.-Reuters