Futures on corn were mixing on Monday. The closest contracts were in higher demand most part of the trading session. Later they declined amid the profit being fixed after renewal of highs.
By the end of CBOT trades, July futures on corn lost 4 ½ cent (0.6%) down to USD 7.82 ½ per bushel.
The nearest contracts grew in the beginning of trades amid rising cash prices as importers, ethanol producers and cattle farmers have been concerned over less supplies later this year. Cash prices grow faster than futures as those who have been purchasing corn now want to have goods as soon as possible, before autumn comes.
Traders say that the basic levels (difference between cash prices and futures) have been strengthening all over the Middle West of the USA which is a bright sign of intense demand for grains.
Concerns over less corn reserves due to strong demand intensified after the US Agriculture Department lowered its forecasts regarding grains supplies last Thursday. The US government predicts that the corn reserves will reduce further by the end of the next trading year starting September 1. The drop will exceed the forecasts due to bad weather conditions and floods this spring which caused suspense in seeding. It may have impact on harvest this year.
This factor is bullish for the market: it can push the prices up higher, market participants believe.
