Corn futures on the Chicago Board of Trade closed mixed on Monday with good crop weather in the US Midwest and follow-through selling from Friday's lower close hampering attempts to rally prices, traders said.
A rally in soy helped underpin corn futures, leading to the narrowly mixed close, they said. Traders and analysts said the soybean market was the market leader following the USDA forecast for 2007 US soy acres on Friday that was well below analysts' estimates.
CBOT corn closed 1-1/2 cents per bushel lower to 1 cent higher, with July up 1 at $3.30-1/2 per bushel. New-crop December was down 3/4 at $3.50 per bushel. Volume was large estimated at 293,081 futures and 83,545 options. That was down from the 364,664 futures and 105,115 options traded Friday.
Traders said Friday's USDA plantings report that pegged 2007 US corn acreage at 92.888 million, over 2 million acres more than the average of analysts' estimates, was the key bearish factor for corn futures prices. The corn area would be the largest since 1944.
Pressure on prices also stemmed from satisfactory corn growing weather and on a break in the wheat market. Traders and analysts said corn futures would remain volatile. But for now, attempts to rally corn futures will be muted by improving crop ratings and prospects for a bumper corn crop this year in the United States.
Analysts expected USDA late on Monday to show a roughly 1 to 2 percent improvement in corn crop ratings and weather this week is seen conducive to further improvement in the corn crop. However, USDA reported after the close that corn conditions were unchanged in the week with 73 percent of the corn in good to excellent condition.
Conditions were mostly favourable for corn and soybean development in the US Midwest over the weekend as mild temperatures limited stress due to dryness in some areas, a forecaster said Monday.
The remainder of the week should be mostly clear belt-wide. "The weather is trending a little warmer and drier. Western Iowa has had below-normal rainfall the last 30 days ... there's a little stress but nothing significant to hurt the corn," said Joel Burgio, a forecaster with DTN Meteorlogix.
July is the critical growing period for corn as it pollinates. So far, conditions generally have been mild for the young crop, except for dryness in the far eastern Midwest states of Ohio, Michigan and eastern Indiana.
Export activity on Monday included Israel's tender for up to 56,000 tonnes of US or South American corn, and Asian grain importers were termed likely to seek corn because US prices fell sharply on Friday amid the bearish US government data released early that day.
Deliveries on the July contract on Monday totalled 1,683 lots and there was scattered stopping. Cash basis bids in the Midwest were unchanged and farmer selling was slow. Friday's CFTC report showed large speculators long 266,308 lots, down 34,856, and short 68,483, up 3,356. Index funds were long 373,540, up 2,223, and short 10,803, down 4,878.
The September contract is below all key moving averages and nine-day relative strength index is at 20. Technical traders view an RSI of 30 or less as an oversold market and 70 or more as an overbought market.
Oat futures closed unchanged to 12-1/2 cents per bushel higher, with July up 12-1/2 at $2.91. The July contract was supported by a lack of deliveries and short-covering. Volume was moderate estimated at 1,102 futures and 25 options.