U.S. corn futures trading slightly higher on positive technical signal after price drop Monday
--Market participants adjusting positions ahead of USDA crop report due Wednesday
--USDA reports progress in U.S. corn harvest ahead of schedule, in line with expectations
CHICAGO--U.S. corn futures are trading slightly higher Tuesday morning on positive technical signals and positioning ahead of a government crop report.
In electronic trading, Chicago Board of Trade futures for December delivery are up 2 3/4 cents or 0.4% at $7.86 a bushel.
On Monday, December corn fell as market participants sold futures to reduce risk ahead of the U.S. Department of Agriculture's monthly supply-and-demand report due out Wednesday at 8:30 a.m. EDT.
But futures on Monday stopped falling when they neared the contract's 50-day moving average around $7.80. That allowed futures prices to stabilize on Tuesday, as technical traders saw the limit to the fall as reason for confidence in higher prices.
"The 50-day moving average is probably the key point to be looking at," said Bill Gentry, an analyst for brokerage Risk Management Commodities in Indiana. "We dropped down to it yesterday and stopped right there."
Trading could be choppy on Tuesday as market participants continue to adjust their positions before the USDA report. Partly because managed funds have a very large net position betting on higher prices for corn futures, a sell-off could occur on Wednesday even if the USDA lowers its estimates for the U.S. corn crop, Mr. Gentry said.
Analysts on average expect the USDA to cut its forecast for the national average corn yield this year to 120.6 bushels an acre from 123.4 bushels an acre, due to the country's worst drought in decades, according to a Dow Jones poll.
They also expect the USDA to cut its forecast for domestic corn inventories at the end of the 2012-13 marketing year to 618 million bushels from the 650 million forecast in its report last month...
Source: Argentine Beef Packers S.A.