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CBOT corn closes lower as soy sags, corn stocks

CHICAGO: Corn futures at the Chicago Board of Trade closed lower on Wednesday on a decline in soybeans and on the relatively large supply of U.S. corn, traders said.

Corn closed unchanged to 1-1/4 cents per bushel lower, with March down 1-1/4 at $2.20-3/4.

The soybean market led the way down Wednesday on signs of a recent improvement in crop prospects in South America, mainly in Brazil's southern soy growing region. Recent rain and forecasts for more this week weighed on soybeans and corn was dragged down as well.

Corn continues to struggle during fund-related rallies amid the large stocks of corn -- estimated by the U.S. Department of Agriculture at 1.714 billion bushels -- expected to be carried into the 1999/2000 marketing year.

But traders cited commercial buying interest near the current levels with buy orders noted below the market with demand expected to surface if March CBOT corn pushed near or below the $2.20 level.

CBOT corn appeared to be settling into a trading range, traders said, which may confine it for the next few weeks barring significant outside fundamental developments. Price gains likely will be stymied by abundant U.S. corn stocks and continued competition for export business from China, traders said.

Longer-term, concerns over potential dryness in the Midwest during the upcoming growing season could provide support, traders said. Meteorologists said that behaviour of the La Niqa weather pattern suggests much of the United States may continue to receive below-normal precipitation this year.

Chicago trading firm R.J. O'Brien & Associates placed technical support for March corn at $2.17-1/2-2.16-1/2 and resistance at $2.31. It said that the market was still slightly overbought after surging to four-month highs last week, and could move lower.

A close below the $2.17-1/2-2.16-1/2 level would target $2.07-1/2, R.J. O'Brien said in a report Wednesday.

In overnight export activity, Taiwan Sugar Corp bought 18,000 tonnes of U.S. corn and 12,000 tonnes of U.S. soybeans at a tender on Wednesday, traders said in a previous Reuters report.

Farmers Commodities Corp., TENCO Commercial Grain and Cargill Investor Services each sold about 200 March shortly before the close. Merrill Lynch bought 500 March, TENCO Commercial Grain bought 800 December, FIMAT Futures Inc. sold 400 March and Cargill Inc. sold 100 December and 500 May and bought 100 July.

Corn futures volume was estimated by the CBOT at 42,000 lots, below the 47,208 lots traded Tuesday.

Corn options volume was estimated at 10,000 lots.-Reuters