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CBOT corn closes lower as Midwest weather improves

CHICAGO: Corn futures at the Chicago Board of Trade closed lower Monday after crop-enhancing weekend rainfall in the U.S. Midwest growing region and forecasts for more rain this week pushed prices lower, traders said.

Corn closed 3-3/4 to 5 cents lower, with May down 5 at $2.35-3/4.

"The weather is the dominant factor in this market. We have more water this week than what the trade was expecting and the water puts a dent in the drought," said Don Roose, analyst for U.S. Commodities in Des Moines, Iowa.

The weekend rain helped to ease concerns over crop prospects following an unseasonably warm and dry winter that had depleted soil moisture in many areas of the Midwest.

Last Friday, corn rallied to 6-1/2-month highs following a forecast for below- normal precipitation and above-average temperatures in the Midwest this spring and later.

Traders said last week there was a need to build a premium into the market to reflect uncertainty over crop prospects because of the prevailing weather conditions.

Early Monday, Weather Services Corp. meteorologist Joel Burgio said the Corn Belt had benefited from weekend rain and the region was expected to receive more moisture this week.

The eastern Corn Belt could see showers Monday and Wednesday, although Tuesday should be dry, Burgio said.

The extended outlook called for 0.25 to 0.75 inch of rain in the Midwest on Thursday and Friday.

Burgio said the central and southern Midwest received the heaviest rainfall with "some pretty decent rains in central Illinois and central Indiana, some of the big acreage country."

From 0.10 inch to 0.35 inch of rain and snow fell in the west and from 0.30 inch to 1.00 inch in the eastern Corn Belt, he said.

Also Monday the market was reminded of the potential large acreage this year in the U.S. for corn and soybeans.

Memphis, Tennessee-based analytical firm Sparks Cos. forecast U.S. corn plantings this year at 77.38 million acres, trade sources said.

In 1999, U.S. farmers planted 77.4 million acres of corn, according to the U.S. Department of Agriculture. The USDA 2000 plantings report is due out on March 31.

In the export arena, the Philippines' National Food Authority bought 41,000 tonnes of Chinese corn.

The Korea Corn Processing Industry Association bought 105,000 tonnes of Chinese, Argentine or U.S. No. 2 corn by option on Friday, traders in Seoul said Monday.

South Korea's National Livestock Cooperative Federation passed on a purchase of 182,500 tonnes of Chinese corn on Monday due to high prices, traders in Seoul said.

Technical traders cited support in May corn at $2.38-1/4 with second support at $2.34. Resistance was at $2.42-1/2.

Funds sold 1,500 lots. Tenco sold 1,000 May, Carr Futures sold 300 May, FIMAT Futures sold 1,500 May, bought 1,000 May, 200 July, Refco Inc. sold 500 May, 100 December, bought 200 May. Cargill Inc. bought 1,000 May $2.20 puts.

Corn futures volume was estimated by the CBOT at 68,000 lots, below the 90,932 lots traded Friday.

Corn options volume was estimated at 21,000 lots.ÑReuters