Corn futures at the Chicago Board of Trade ended weak on Tuesday on a profit-taking setback after the strong gains on Monday, traders said. CBOT corn closed 1/2 to 2-1/2 cents per bushel lower, with July down 2-1/2 at $3.93-1/2 per bushel. New-crop December was down 1/2 at $4.05-1/2 per bushel.
Funds were even to light net buyers. Spread trade electronically was estimated at 31,000 July/September and 27,700 July/December. Volume was heavy, estimated by the CBOT at 321,426 corn futures and 54,126 options.
Traders said some forecasts for near normal weather for much of the US Midwest also weighed on the market but concerns are mounting about the eastern Midwest, which is in need of rain.
Dry weather around the eastern half of the US Midwest is threatening the growth of recently planted corn but the yield potential has not yet been permanently damaged, agronomists and grain dealers said on Tuesday. "The plants are under stress," said Dennis Bowman, extension educator at the University of Illinois. "It is not dire yet but we need a rain."
DTN Meteorlogix weather on Tuesday said the central and eastern areas of the US Midwest crop region continue dry and the area is expected to remain quite warm and dry for at least a week.
Soil moisture reserves continue to decline at a time when US farmers have boosted corn seedings to the highest level since 1944 to take advantage of 10-year-high corn prices. The demand for corn continues brisk from the export and livestock sectors while corn usage from the ethanol industry keeps expanding.
Some pressure stemmed from a decline of only 1 percentage point in US corn condition ratings as reported by the USDA late on Monday, because the trade was expecting a 1 to 3 percentage point decline, they said.
USDA late on Monday said 77 percent of the US corn crop was in good to excellent condition, down from 78 percent a week ago. Ninety-nine percent of the crop had emerged, up from the 95 percent five-year average.
Export activity overnight and early on Tuesday included news South Korea bought 50,000 tonnes of corn from China and traders in Seoul said the deal was struck late on Friday. Cash basis bids for corn in the Midwest on Tuesday were weak and farmer selling was slow.
Technical traders were watching the July contract facing resistance at its 100-day moving average of $3.99-1/2 per bushel and the nine-day relative strength index closed at 61. Chart-based 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 3-1/2 cents per bushel lower, with July down 3-1/2 at $2.91 per bushel. Oats volume was estimated at 1,047 futures and 89 options.