Corn futures on the Chicago Board of Trade ended weak on Monday with the market setting back on a bout of profit-taking after Friday's strong gains, traders said. Traders said prospects for a big corn crop this year amid an expansion in corn acreage continue to act as a bit of an anchor on the corn futures market.
However, the market appears to be in a trading range and consolidating ahead of the spring planting season for the 2007 US corn crop. "It's too early to trade the weather, and there is nothing else going on in the market," said Shawn McCambridge, analyst for Prudential Financial.
"We're kind of in the winter doldrums as far as new information coming out. We've seen a drop in trading volume, and that kind of goes along with the lack of new fundamental features coming in." CBOT corn closed 2 cents per bushel lower to 1/2 higher, with March unchanged at $4.02 per bushel.
Volume was light, estimated by the CBOT at 121,822 corn futures and 27,341 options. Pressure on corn may be stemming from news on Friday that a ProFarmer survey cited 2007 US corn acreage could increase up to 12 million from last year.
"We have to get it planted so a wet late April and May would be bullish for corn and planted acreage could swing 1 to 1-1/2 million acres depending on weather," said Daniel Bluntzer, director of research for Frontier Risk Management. "The problem is there is no margin for error this year," Bluntzer said.
Exports were quiet over the weekend and grains and oilseed importers in South Korea and Taiwan are likely to be quiet this week amid rising soy and corn prices, traders in Taipei said on Monday.
The surging demand for corn to meet ethanol needs continues to generate concern about high corn prices and related expense to the livestock industry. USDA Secretary Mike Johanns assured US cattle producers on Friday that the government will work hard to encourage other ways of making ethanol to give them relief from high corn prices.
Crop weather is satisfactory for crop production in the United States and in South America. Plentiful winter precipitation in the US Midwest is adding to soil moisture reserves and no serious weather problems in South American crop areas, according to Meteorlogix weather.
Cash basis bids in the Midwest were steady amid slow farmer selling. Friday's CFTC commitments of traders report for futures and options combined showed that as of last Tuesday large speculators were long 369,006 lots, down 4,613 from the previous week, and short 55,647 lots, up 157 lots. Index funds were long 364,320 lots, down 5,770 from the previous week, and short 14,311 lots, up 407 lots. Oat futures closed 1-1/2 cents per bushel higher to 2 lower, with March down 1/4 at $2.57-3/4. Oats volume was estimated at 741 futures and 29 options.