US corn futures lower

US corn futures on the Chicago Board of Trade slipped on Wednesday as traders took profits after corn hit a six-week top early in the session. Corn rallied more than many analysts and traders expected during the past week, given outlooks for US corn stocks to grow due to disappointing demand from exporters and ethanol producers.
But prospects for US farmers to plant fewer corn acres next spring and more soybeans, plus a season high in the soy-corn price ratio hit on December 5, sparked corn/soy spreading. March corn ended 4-1/2 cents lower at $3.89-1/2 a bushel, after hitting resistance at $4.02-3/4. New-crop December corn settled 6-1/4 weaker at $4.35-1/4; new-crop November soy ended 10 up at $8.96.
Corn lost to soybeans - a reverse of the recent trend - after corn rose more than 90 cents since early December. By Tuesday's close, new-crop November soy/December corn price ratio fell to 2-to-1 from 2.28-to-1 on December 5. It closed at 2.06-to-1 on Wednesday.
Volume was moderate estimated at 190,383 futures and 66,687 options. Commodity funds sold 4,000 corn contracts-traders. Corn ended lower despite the weakness in the dollar, typically a buy signal for commodities. The dollar fell to a 13-1/2 year low versus the yen, making US commodities more attractive to overseas buyers and lowering the cost to hold grain.
Dollar slipped after the Federal Reserve cut a key US interest rate zero to 0.25 percent ffrom 1 percent - late Tuesday Dryness in Argentina, the No 2 corn exporter, underpinned corn. Showers and cooler conditions may not reach major growing areas in Argentina until Sunday. Generally good crop weather continues in Brazil.
Midwest basis bids for spot corn were steady late Wednesday amid spotty, light country sales -dealers. Argentine government forecasts 2008/09 corn area at 3.5 million hectares, up from its previous estimate for 3.34 million. China seen raising state corn purchases by 5 million tonnes -traders.
Taiwan buys 23,000 tonnes of US corn, 12,000 tonnes of US soy -traders. CBOT oats fell 3-1/2 to 4 cents, moving in tandem with the weakness in corn. March oats ended down 4 cents at $2.22 a bushel. Commercial selling surfaces near $2.30 in March while commercial buying appears at $2 -traders. Volume was light to moderate estimated at 866 futures.