Chicago Board of Trade corn futures dropped to new contract lows amid bearish export sales data released by the US Department of Agriculture (USDA), traders said. The corn market also continues to be weighed down by the abundant supplies of feed grains in the US and elsewhere, they said. March corn was down 1/2 cent at $1.94-3/4 per bushel. The nearby contracts fell to new lows. The new low for the active nearby March contract is $1.94-1/4 per bushel, below the previous low of $1.95 set on Monday.

Tenco Inc sold 400 March and SAK Futures bought 900 March, pit sources said. Traders said the main pressuring factor on Thursday was news from USDA that US export sales of corn last week totalled only 337,600 tonnes. That's well below trade estimates for 650,000 to 850,000 tonnes.

Exports were routine overnight, with Taiwan buying 60,000 tonnes of US corn from Mitsui, and cash corn basis values in the Midwest were steady to firm as country offerings lagged.

Corn futures were nearing oversold technical levels, with the nine-day relative strength index for March Wednesday closing at 34. Technical traders view an RSI of 30 or less as one indicator of an oversold market.

Technical support in the March contract was at $1.91 per bushel and resistance was at $1.98.

Copyright Reuters, 2005