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CBOT corn closes lower as soya falls sharply

CHICAGO: Corn futures at the Chicago Board of Trade closed lower Thursday on fund selling tied to a drop in soyabean futures, traders said.

Corn closed 1/2 to 2-3/4 cents lower with March down 2-3/4 at $2.18.

"Soyabeans took everything down but also in corn there continue to be the reports about Chinese sales and how the Chinese sales might get bigger," said Dale Gustafson, analyst for Salomon Smith Barney.

CBOT soyabeans led the way down Thursday on outlooks for improved crop weather in South America, mainly in Brazil's southern soyabean growing region.

Some underpinning to corn came from the US Department of Agriculture's weekly export sales report, released early Thursday, which listed net US corn sales for the week ended Jan. 27 at 821,400 tonnes, 28 percent under the previous week but up 8 percent from the four-week average.

The number was at the high end of expectations, which ranged from 600,000 to 950,000 tonnes.

But traders cited only limited bullish enthusiasm for the export numbers, and looked for the market to hold within recent trading ranges.

March CBOT corn reached a four-month high of $2.28-1/4 last week, before pulling back as low as $2.18-1/2 on Monday. Traders anticipated commercial buying interest near or below the $2.20 level.

But, any price upside likely will be muted by abundant US corn stocks and continued competition for export business from China, traders said.

In overnight export activity, the Korea Corn Processing Industry Association bought 52,500 tonnes of US corn via tenders on Thursday, but passed on tenders to buy another 52,500 tonnes, citing high prices. The Korea Feed Association bought 52,500 tonnes of Chinese corn Thursday, traders said in a previous Reuters report.

Funds sold at least 2,000 contracts on the day. FIMAT Futures Inc. sold 600 March and bought 200 May and Cargill Investor Services bought 800 March and sold 400 May. In options, Term Commodities bought 800 May $2.40 calls. In spreading activity, FIMAT Futures bought 1,000 May and sold 1,000 March.

Corn futures volume was estimated by the CBOT at 63,000 lots, above the 41,579 lots traded Wednesday.

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