Corn futures at the Chicago Board of Trade ended mixed on Monday, with weather jitters boosting new-crop months while liquidation of bull spreads buoyed the deferreds and pressured the nearbys, traders said.
"It reflects decent movement of old crop, weakness in the cash basis and hedge pressure on old crop," Shawn McCambridge, analyst for Prudential Financial, said, referring to the demise in the premium of July versus December corn futures contracts.
CBOT corn closed 8-1/4 cents per bushel higher to 1-1/2 lower, with May down 1-1/2 at $3.98 per bushel. July was down 3/4 cent at $4.10. New-crop December was up 3 at $4.06. Volume was heavy. An estimated 217,999 futures and 68,731 options traded. Funds sold 2,000 lots and active trading in corn options was noted, with Man Financial buying 2,000 July $5 calls. Tenco Inc bought 2,000 July $5 calls and sold 2000 July $4 puts.
The July/December spread closed at 4 cents, premium July, down 3-3/4 cents from the close on Friday. July has shed 13 cents per bushel of its value relative to December since last Monday. "New crop continues to attract decent buying, which it should, the closer we get to planting," McCambridge said. The bulk of the corn crop in the United States will be planted from early April through early May.
Spring planting weather in the United States has moved to center stage as a market factor because of the need for a huge corn crop to meet the demand from the export, livestock and ethanol sectors. Any hint of delayed corn plantings now could lend significant support to the sensitive and volatile corn futures market. DTN Meteorlogix weather service said Monday rain for at least the next seven days in the US Midwest will slow field work.
"In the heart of the corn and soybean belt, precipitation was rather abundant through the winter. There are some concerns about the central and northern Midwest drying out enough to get into the fields on time," said Steve Hilberg, director of the Midwestern Regional Climate Center based in central Illinois.
Export activity over the weekend centred on trade sources in Tokyo saying that South Korean buyers were likely to seek June and July corn shipments this week, while Japanese traders also will seek corn and soy but to a lesser extent.
Cash basis bids for corn in the Midwest were mostly steady and farmer selling remained slow. Cash dealers said farmers were waiting for $4 per bushel before selling.
Friday's CFTC Commitments of Traders report for futures and options combined showed that, as of last Tuesday, large speculators were long 339,682 lots, down 32,657 from the previous week, and short 64,835, down 1,796 lots. Index funds were long 372,021 lots, down 684, and short 10,977, up 1,516 lots. Oat futures closed 2-1/2 cents per bushel higher to 1/4 lower, with May up 2-1/2 at $2.77 per bushel.