Corn futures at the Chicago Board of Trade closed higher on Wednesday in quiet consolidation trading after Tuesday's fall to a six-week low, traders said.
Corn had fallen into or near oversold technical levels, leaving open the potential at least a mild short-covering bounce during Wednesday's trade, they said.
CBOT corn closed 1/4 to 4 cents per bushel higher, with September up 4 at $2.39-3/4 per bushel.
Volume was estimated by the exchange at 172,930 futures and 29,611 options. That compared with 229,816 futures on Tuesday. Traders said attempts to rally corn futures were being limited by a turn to good crop weather in the US Midwest crop region.
Showers and moderate temperatures over the next several days will buoy corn and soybean crops in the US Midwest, a private forecaster said on Wednesday.
"I wouldn't call it a wet pattern, but there will be enough rain in the Corn Belt to maintain or improve crop conditions," said Meteorlogix forecaster Mike Palmerino. Position-squaring was noted ahead of the release early Friday of the US Agriculture Department's August crop production and supply/demand reports.
Analysts polled by Reuters pegged US corn production this year at 10.795 billion bushels, above the July forecast for 10.740 billion but below last year's output of 11.112 billion.
The analysts pegged US ending stocks of corn for 2005/06 at 2.037 billion bushels, below the July outlook for 2.062 billion. For 2006/07 the analysts pegged corn ending stocks at 1.093 billion bushels, above the July forecast for 1.077 billion.
Exports were quiet overnight. Grain analysts in Sao Paulo said on Tuesday that Brazilian corn exports were expected to rise to 2.5 million tonnes this year from 1 million last year. Cash basis bids for corn in the Midwest were firm and farmer selling was slow.
Chart-based traders were eyeing the September contract, which stayed below all key moving averages. Its nine-day relative strength index stood at 36 ahead of the open, rising to 45 by the close. Technical traders view a reading of 30 or below as indicating an oversold market.
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