CBOT corn down

Corn futures at the Chicago Board of Trade dropped on Thursday on outlooks for better crop weather in the US Midwest, traders said. CBoT corn closed 5 to 9-1/2 cents per bushel lower, with July down 9-1/4 at $3.85 per bushel. New-crop December was down 7-1/4 at $3.99. Volume was large estimated at 256,867 futures and 62,153 options.
"Beans and corn sold off because there's less threatening weather, more rains were forecast for Illinois and the NWS 30-day forecast was very benign for corn and soybeans," said Mario Balletto, analyst for Citigroup. Plentiful moisture has been received in the western Midwest and current rainfall is benefiting the crop in the eastern Midwest. However, more rain is needed in the east and south-east because dry weather has been stressing the crop in those areas.
Big corn production is needed this year to meet the surging demand for corn from the ethanol industry. US farmers planted the largest corn area since 1944 to capture 10-year highs for corn prices.
The US Midwest was warm and dry the past day, but showers were expected to move through starting late Thursday, recharging topsoil moisture in the eastern belt for developing corn and soybeans, a forecaster said Thursday.
"The rain is going to be very beneficial in the main growing areas of the Corn Belt, including some of the areas that have been dry this growing season," said Mike Palmerino of DTN Meteorlogix.
Also, the National Weather Service said on Thursday that the weather anomaly La Nina could develop later this summer, but it was not likely to affect weather in the United States during the next few months.
There has been some concern that the current El Nino system will shift to the La Nina phenomena by summer which could lead to hot and dry weather in the US Corn Belt.
Traders and analysts glanced at updated export data from the US Department of Agriculture and took note of a solid number for corn in USDA's weekly export sales report that was released early on Thursday. The agency said 988,500 tonnes of corn were sold for export last week, above estimates for 500,000 to 800,000 tonnes.
The cash basis bids for corn in the Midwest were mostly steady and farmer selling was slow. Cash dealers said farmers have grown accustomed to these current higher corn prices and are in no hurry to sell their crop.
The July contract broke support at its 20-day moving average of $3.89-1/2 with next support at the 50-day MA of $3.79-1/2. The nine-day relative strength index closed in neutral territory at 44. Traders view an RSI of 70 or more as an overbought market and 30 or less as an oversold market. Oat futures closed unchanged to 6-3/4 cents per bushel lower, with July down 4 at $2.71 per bushel. Volume was large estimated at 2,499 futures and 68 options.