Corn futures at the Chicago Board of Trade closed mostly higher on Tuesday, led by old-crop contracts amid firmer cash markets and a technical recovery, traders said. Fund buying, estimated at 6,000 lots, led the way up, the traders said.
"Gulf bids are firmer and we had a technical turnaround with May bouncing off the 100-day again," said Jerry Gidel, analyst for North America Risk Management Inc.
CBOT corn closed unchanged to 7-1/4 cents per bushel higher, with May up 7-1/4 at $4.05-1/4 per bushel. July was up 7 at $4.17 and new-crop December was up 3-1/4 at $4.09-1/4.
Volume was estimated by the CBOT at 228,756 corn futures and 48,383 options.
Traders said the past week's liquidation of bull-spreads had driven the nearby contracts sharply lower relative to the deferreds, leaving open the potential for a sharp rebound in prices for the nearby, or old-crop, months.
"The spread I think got a little out of line, the market got oversold and psychologically the $4.00 level is definitely a positive in the May," Gidel said.
May fell to a session low of $3.95, which was its 100-day moving average. And for the third day in a row, selling waned at that level, allowing relatively small-lot demand to boost the contract to a sharply higher close.
The nine-day relative strength index for May stood at 29 prior to the open on Tuesday. Technical traders view a reading of 30 or below as indicating an oversold market.
Traders expect choppy two-sided trade ahead of the release in late March of the government's planting intentions report.
The corn market, especially the distant or new-crop months, was finding underlying support from outlooks for wet weather that may slow US corn seedings. Yet the added soil moisture also was seen boosting long-term prospects for the 2007 crop.
DTN Meteorlogix weather service said Tuesday rain in the US Midwest, especially in eastern regions, over the next week would slow spring field work, leading to some concerns about a slow start for corn seedings.
The bulk of the US corn crop will be planted from early April through early May.
The corn market has dilated in the largest US corn acreage in 60 years and is banking on a record large crop, perhaps more than 12 billion bushels - weather permitting.
Export activity overnight failed to generate any bullish momentum for corn futures. The Philippines set a tender for April 11 for 200,000 tonnes of optional-origin corn, but that news was viewed as routine by the market.
Oat futures closed 3/4 to 6-1/2 cents per bushel higher, with May up 6-1/2 at $2.83-1/2. Oats volume was estimated at 1,739 futures and 31 options.