20000112

CBOT corn closes higher on report positioning

CHICAGO: Corn futures at the Chicago Board of Trade closed higher Monday on short covering tied to position squaring before the release Wednesday of the U.S. Department of Agriculture's final report on 1999 crop production, traders said.

Corn closed 1/4 to 1-3/4 cents higher with March up 1-1/2 at $2.08-1/2.

Corn early Monday traded lower as soyabeans sagged but the decline in the soya complex was not as pronounced as some were expecting. Soyabeans closed lower but there was a relatively firm undertone in the market and that kept aggressive selling away from CBOT corn futures, they said.

Soyabeans found pressure on forecasts for rainfall this week in key southern soyabean areas in Brazil.

Gains in corn were limited by improved crop weather in Argentina. Argentina received rainfall over the weekend, but it may be too late to prevent some yield losses due to dry conditions, Weather Services Corp. said.

Scattered showers and thunderstorms bringing 1/4 to 3/4 inch of rain, with locally heavier amounts, fell in Argentina over the weekend, WSC said.

WSC projected episodes of scattered showers and thunderstorms the next two to three days in the corn and soyabean areas of Argentina, with amounts of 1/4 to 1 inch likely.

In the U.S. cash market, Spot corn basis bids were mostly lower Monday following stepped-up farmer selling late last week, grain dealers said. Increased farmer selling typically leads to hedging pressure on futures.

The latest South American weather outlook was viewed as bearish for corn and soyabean prices, but traders anticipated limited price downside ahead of U.S. Department of Agriculture reports Wednesday on quarterly stocks, supply and demand and final 1999 U.S. crop production.

An average of analysts' estimates placed the 1999 U.S. corn production at 9.544 billion bushels, slightly above the USDA November forecast for 9.537 billion bushels.

Some bearish input came from USDA's weekly export inspections report.

USDA reported during the week ended January 6 U.S. corn inspected for export totalled 28.675 million bushels, at the low end of estimates for 28.0 million to 33.0 million bushels.

Funds bought 3,600 lots as of 11:30 a.m. CST.

In late dealings, Merrill Lynch Futures bought 1,000 March. Also Cargill Inc. sold 600 March in late trading to bring the firm's total sales on the day in the March to 1,100 lots and purchases of March to 900.

FIMAT Futures bought 1,500 March and E.D. and F. Man International bought 1,200 March plus 700 July. ADM Investor Services sold 500 March, Term Commodities sold 200 March and O'Connor and Co. sold 300 March.

Corn futures volume was estimated by the CBOT at 69,000 lots, above the 59,376 lots traded Friday.

Corn options volume was estimated at 15,000 lots.-Reuters-Reuters

-Reuters