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CBOT corn closes lower as early gains erode

CHICAGO: Corn futures at the Chicago Board of Trade closed lower on Tuesday as buying momentum waned after early follow through technical strength from Monday's climb to two-month highs.

Corn closed 1/2 to 1-1/2 cents lower, with March down 1-1/4 at $2.07-1/4.

Traders were readying for a flood of US Department of Agriculture data on Wednesday, and appeared unwilling to take substantial positions on either side of the market. Speculative commodity funds hold a sizable short position in the corn market, traders said, and early Tuesday there was addition buying back some of those shorts ahead of the reports.

The USDA will release reports on US winter wheat acreage, monthly supply and demand, quarterly US stocks and final 1999 US corn and soyabean production.

On Monday, March corn futures closed at $2.08-1/2, the contract's highest settlement since $2.12 on Nov. 9. Traders said the market's technical posture appears to have firmed up, with prices recently moving above several key chart moving averages, which are among the indicators followed by funds.

The 100-day moving average for March corn was $2.13-1/4 at Monday's close.

In US cash markets, corn basis levels were mostly steady early Tuesday and farmer selling was light, limiting hedging pressure on futures, merchants said. Merchandisers expected farmers to wait until after the USDA reports before making any decisions on sales.

Funds bought 500 lots. Cargill Inc. sold 1,000 March. FIMAT Futures Inc. sold 600 March, ADM Investor Services (ADMIS) sold 800 March, bought 200 September and 800 December, Prudential Securities bought 800 May and Refco Inc. bought 200 March.

Corn futures volume was estimated by the CBOT at 55,000 lots, below the 65,255 lots traded Monday.

Corn options volume was estimated at 16,000 lots.-Reuters