Corn futures at the Chicago Board of Trade closed lower on Tuesday on better corn planting weather this week in the US Midwest, traders said. "The weather this week is a little more favourable for planting," said Mario Balletto, analyst for Citigroup.
CBOT corn closed 2-1/2 to 11-1/2 cents per bushel lower, with May down 11 at $3.53-1/4 per bushel. New-crop December was down 10-3/4 at $3.79-1/2. An estimated 250,429 futures and 41,602 options traded, compared to 204,232 futures and 66,283 options that traded on Monday.
Traders also said there were some weather forecasters hinting at better seeding weather again next week and there were some longer-term outlooks for good growing weather in the Midwest this summer.
A drop in crude oil, unwinding of corn/wheat spreads and technical selling when May broke support at its 10-day moving average of $3.60-1/2 also weighed on corn futures prices. Corn opened higher after the release late on Monday by USDA of US corn planting data that was below expectations. Plantings have been slowed by wet and cold weather.
However, there was no bullish momentum in early dealings and traders chose to focus on the bearish implications stemming from drier and warmer weather this week in the key corn growing areas of the US Midwest.
"Very volatile with wild swings. It doesn't take much to spook the market one way or the other, it's a weather market," said Vic Lespinasse, floor spokesman for A.G. Edwards and Co.
It will be mostly dry in the US Midwest this week, which should help farmers move ahead on spring field work, a forecaster said Tuesday. "There's nothing in the forecast to see planting shoot ahead of normal, but it doesn't look like they are going to be falling further behind," said Mike Palmerino, a forecaster with DTN Meteorlogix.
USDA late on Monday said US corn plantings stood at 4 percent complete, up from 3 percent a week ago but below the five-year average of 9 percent. Farmers are expected to plant the most corn acreage in the United States since 1944 and sowings need to be completed by roughly mid-May to obtain optimal or maximum yield per acre.
A drop in crude oil markets also may have weighed on corn futures a bit because of corn's closer ties now to the energy sector as the ethanol industry gains traction. Export news failed to generate any bullish momentum. South Korea overnight passed on a tender to buy 495,000 tonnes of corn due to higher prices and Taiwan passed on a tender to buy US corn and soy. The Philippines will tender on May 17 to buy 80,000 tonnes of corn.
Cash basis bids for corn in the Midwest on Tuesday were mostly steady with a firm tone in Nebraska due to good processor demand. Oat futures closed unchanged to 4-1/2 cents per bushel lower, with May down 1-3/4 at $2.67 per bushel.