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CBOT corn ends up as soy rallies, feed needs grow

CHICAGO: Corn futures closed higher on Monday, climbing near four-month highs amid strength in soyabeans and signs of stronger domestic feed demand, traders said.

Corn closed 3/4 to 4-1/2 cents higher, with March up 4-1/2 at $2.27-1/4.

CBOT soyabeans jumped more than 6 cents shortly after the open, providing a boost to other CBOT markets, traders said. Soyabeans rose on disappointment over weekend rainfall amounts in South America and ongoing fears of crop losses due to dryness.

Soyabeans were the focal point on the CBOT floor Monday but corn futures found some independent strength from various sectors.

"There was positive demand news domestically with the cattle on feed report telling us we're feeding a lot of livestock," said Jason Roose, analyst for U.S. Commodities, Des Moines, Iowa.

The USDA on Friday reported the number of cattle on feed in the U.S. as of Jan. 1 at 11.455 million, 7 percent more than a year ago. Roose said corn continued to see support from U.S. Department of Agriculture crop reports released earlier this month.

"It changed attitudes and the trade is starting to realise the need for a premium in the market going into spring," Roose said.

U.S. corn exports showed signs of picking up, with South Korean grain buyers expected to be active this week, traders in Asia said on Monday.

The Korea Feed Association bought 104,000 tones of Chinese, U.S. or Argentine corn Monday.

But an aggressive export stance by China, with its abundant corn stocks, was likely to provide stiff competition for corn business in Asian markets, traders said.

Funds bought 12,000 lots. Prudential Securities bought 2,800 March and 3,200 May, FIAT Futures bought 1,300 March and 2,000 May, Recon Inc. bought 1,000 March and Term Commodities sold 1,200 March.

Corn futures volume was estimated at 90,000 lots, above the 63,091 lots traded on Friday.-Reuters