Corn futures drop

US corn futures dropped for a third straight session on Tuesday because of sluggish demand and expectations for wetter weather in world No 3 exporter Argentina. Soyabean prices rebounded from an earlier profit-taking slump on technical buying and some concerns that the still-developing South American crop may shrink further if the weather worsens.
Wheat dropped for a fourth consecutive day and hit a 3-1/2 week low on forecasts for rain in the drought-parched US Plains. Some investors were beginning to take positions ahead of Friday's US Department of Agriculture monthly supply and demand reports, which were expected to show tighter US and global soyabean stocks and a larger US corn supply.
"The closer we get to Friday's USDA report I think we'll see some more positioning and profit-taking and settle into a little more of a range," said Dax Wedemeyer, a broker for US Commodities. Wedemeyer said that the Argentina forecast looks a little wetter in the next six to 15 days, "but confidence is kind of low because rains in these areas have been less than expected in the last two weeks."
Argentina is the world's No 3 soyabean and corn exporter after the United States and Brazil. Consumer nations are hoping it can provide ample supplies of both crops to bolster world food stocks. Wedemeyer said that for soyabeans "there's still a lot of unknowns as far as how much of the crop in Argentina has been affected by the recent dry weather."
Chicago Board of Trade March soyabeans rose 6-3/4 cents, or 0.5 percent, to $14.95-1/2 per bushel after touching a seven-week high of $14.98 on Monday but failing to breach chart resistance at $15 per bushel. CBOT March corn fell 5-1/4 cents, or 0.7 percent, to $7.29 per bushel. The contract found underlying support at the 50-day moving average of $7.23-1/4 and overhead resistance at the 100-day moving average of $7.35-1/4.
Spot corn has also struggled to breach the $7.50-per-bushel mark as high prices have pared demand from both exporters and ethanol makers. Several ethanol plants have been shuttered in recent weeks, most recently an Ag Processing Inc plant in Hastings, Nebraska. CBOT March wheat fell 5-1/2 cents, or 0.7 percent, to $7.57-1/2 a bushel. Commodity funds bought an estimated net 4,000 soyabean contracts on the day and sold a net 6,000 corn and 3,000 wheat contracts, trade sources said.