US corn futures on the Chicago Board of Trade closed lower on Tuesday, pressured by a sell-off in the crude oil market and a firmer dollar, traders said. The weakness in crude overshadowed concerns about the slow pace of US corn planting and emergence, especially after heavy weekend storms and a drop in temperatures in the Midwest.
"The emergence has been very slow, and that's part of the issue here. So you're seeing good support on any breaks," said Jack Scoville, an analyst with the Price Futures Group in Chicago. CBOT July corn fell 1-3/4 cents to close at $5.98 per bushel, with new-crop December down 1-3/4 at $6.25-1/2. Funds sold 2,000 contracts, traders said.
Volume was relatively light at an estimated 138,467 futures and 45,172 options. After the close, USDA said the US corn crop was 88 percent planted, behind the five-year average of 94 percent, and within trade expectations for 85 to 90 percent. USDA said only 52 percent of the US corn crop had emerged by Sunday, near trade expectations but well below the five-year average of 76 percent.
USDA said 38.637 million bushels of US corn were inspected for export in the latest week, above estimates for 31-37 million. USDA late Tuesday said it would open more than 24 million Conservation Reserve Program acres to haying/foraging to help the cattle industry cope with high feed costs. Mexico will eliminate import tariffs on white and yellow corn, wheat, rice, sorghum and soya paste, Mexican President Felipe Calderon said over the weekend.
Rains and cool temperatures in the US Midwest have slowed planting and emergence. Heavy rains pounded parts of the Midwest-the western Midwest and Illinois were hit hard with the heavy rains, a DTN Meteorlogix forecaster said. The Midwest will be cool again this week, warming up by the weekend.
US Midwest spot basis bids for corn were steady to firm, with farmer sales quiet as they focus on planting, dealers said. The supplement to CFTC's weekly reports on Friday showed large speculators expanded their net long position in corn to 185,388 contracts in the week ended May 20, up 5,000 lots.
Worries of tight supplies, record high crude oil and strong demand for biofuel will keep fundamentals intact for corn in 2008, Dutch bank Rabobank said. Turkey bought 140,000 tonnes of corn (maize) in a tender; origins said to be Canada, Ukraine, Argentina. CBOT July oats closed 8-1/2 cents higher at $3.94 per bushel, with back months up 1 to 8-1/2 cents. Oats volume was estimated at 1,643 contracts.