20000305CBOT corn closes higher on late gains in soybeans

CHICAGO: Chicago Board of Trade corn futures closed higher Friday on follow-through support from Thursday and strength in soybeans.

Corn closed 1-1/2 to 2-1/4 cents higher with March up 2-1/4 at $2.18-1/2. May was up 1-1/2 at $2.25-1/2.

Spot March gained on spreads on commercial stopping of deliveries. There were 801 lots posted Friday for delivery on the March and Cargill was a key stopper of 523 lots.

"Everything about the weather is bearish so I think corn just followed beans higher. There is a two-sided trade here but I don't think the gains can last very long," said Fred Soneson, analyst for LFG.

Corn futures ended on a high note on Thursday, lifted by a late rally on soybeans amid commodity fund and commercial buying and supported by higher-than-expected weekly US export sales reported by the US Department of Agriculture.

On Friday, soybeans were higher on follow-through support coupled with spillover strength from soyoil.

The corn market was also being underpinned by caution amid a possible turn in the weather to dry conditions this spring or summer in the US Midwest, traders said.

"The market is short already, and it's just a little dangerous to be there at these cheap prices," a trader said. Export action for corn was fairly mundane early Friday with no large tenders cited.

Taiwan's Members Feed Industry Group bought 56,000 tonnes of US corn at a tender on Friday, traders said.

The shipment was bought on a FOB basis from grain company Mitsui with freight rates of US$20.95 per tonne.

Near-term weather suggests a potential healthy start for the US corn crop that will begin to be seeded in April and gain momentum in early May.

Weather Services Corp. early Friday reported a few light rain showers over the extreme eastern US Midwest, but otherwise it was dry.

A pattern of wetter weather, including the previously dry areas of the northwest, makes soil moisture favourable as the planting season approaches. This is a better outlook for the planting as long as dryness does not return, WSC said.

The market this week was dealing with heavy delivery notices on the March contract. Tuesday was first notice day, and on Friday 801 lots were posted against the March, a large amount, but well below the 2,628 lots posted Thursday.

Funds bought 1,300 lots. FIMAT Futures bought 1,000 May, 300 July and 100 March, ADM Investor Services and Cargill Inc. bought 200 March and Cargill sold 200 May, Refco Inc. bought 300 December and TENCO Commercial Grain bought 200 March.

Corn futures volume was estimated by the CBOT at 68,000 lots, above the 60,575 lots traded Thursday.

Corn options volume was estimated at 14,000 lots.-Reuters