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CBOT corn ends higher, shrugs off heavy deliveries

CHICAGO: Chicago Board of Trade corn futures closed higher Tuesday, shrugging off large delivery notices posted on the March contract.

Corn closed 3 to 5 cents higher with March up 3 at $2.15. May closed 3-1/4 higher at $2.24.

"The climax of the bearish news may have been the heavy deliveries," said Don Roose, analyst for US Commodities, Des Moines, Iowa. Roose said that although US Midwest crop weather recently improved, more rainfall is needed to ensure a healthy start for the soon-to-be-seeded crop.

Delivery notices posted Tuesday against the March contract totalled 4,021 lots, well above expectations for 500 to 1,000 lots. Tuesday was first notice day for delivery notices to be posted against CBOT March futures.

Some traders said improved crop weather continued to weigh on the market. Weather Services Corp. early Tuesday said soil moisture is mostly favourable at this time. This is a better outlook for upcoming spring planting after previous dryness, WSC said.

"There is a little wetter pattern but it's also warmer. In the back of everybody's mind is the weather and we're still at a deficit moisturewise," Roose said.

In export business, the Korea Corn Processing Industry Association bought 52,500 tonnes of US or Argentine corn, and Taiwan may be in the market soon.

Taiwanese importers were expected to invite tenders for one or two cargoes of US corn this week, taking advantage of price falls on the Chicago Board of Trade, traders in Taipei said Tuesday.

The Members Feed Industry Group, one of the island's two main grain buying groups, was considering tendering for one shipment of US corn this week, but the group had yet to decide the tender date, an executive said. "The CBOT price is low enough now. It's about time to buy," he said.

Funds bought 1,000 lots. Cargill Inc. bought 1,000 December, 500 September, 200 May and sold 700 May. Cargill Investor Services bought 1,200 May, E.D. and F. Man International bought 1,000 May, ADM Investor Services sold 1,000 May and Refco Inc. sold 800 May.

Corn futures volume was estimated by the CBOT at 130,000 lots, below the 145,667 lots traded Monday.

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