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CBOT corn closes higher on bullish USDA data

CHICAGO: Corn futures at the Chicago Board of Trade closed higher Thursday on fund buying, bullish chart signals and follow-through from Wednesday's USDA crop production and supply/demand reports, traders said.

Corn closed 3 to 5-1/2 cents per bushel higher, with March up 5-1/4 at $2.20-3/4.

Nearby March surged to a 3-1/2 month high at $2.21-1/2, the highest level for that month since $2.24-1/4 was notched on September 30.

"It was follow-through from yesterday's numbers and the fund buying was huge," said Dan Cekander, analyst for FIMAT Futures.

Corn futures soared Wednesday and again Thursday after the US Department of Agriculture released unexpectedly low estimates for 1999 US corn production and 1999/2000 stocks.

Floor sources pegged the fund buying Thursday at roughly 15,000 lots, bringing the two-day total (Wednesday and Thursday) to between 30,000 to 35,000 lots.

"In general there's a concern now on the part of commercials that funds may keep buying it to accumulate some massive long position ahead of a potential weather scare," Cekander said. There were reports this week that La Niqa-related weather in the US Midwest may linger into summer, leading to dry weather and lower crop yields.

Gains were limited and prices sagged in early dealings Thursday on increased farmer selling and bearish input from the export sector.

Cash corn bids around the Midwest fell 2 to 7 cents early Thursday, after farmers responded to Wednesday's futures surge by making fresh corn sales, merchants said.

Although the pace of the grain movement slowed Thursday morning, some farmers continued to show interest in moving corn, cash dealers said.

Weekly export data from the US Department of Agriculture was considered disappointing. The USDA listed net US corn sales during the week ended Jan. 6 at 282,000 tonnes, a marketing year low and 43 percent below the previous week. Expectations were for 550,000 to 1 million tonnes.

Funds bought 15,000 lots. Prudential Securities bought 4,000 March, Merrill Lynch Futures bought 5,000 March and ADM Investor Services sold 3,000 March.

Corn futures volume was estimated by the CBOT at 125,000 lots, below the 180,575 lots traded Wednesday.

Corn options volume was estimated at 46,000 lots. -Reuters