U.S. corn futures are trading slightly higher in low-volume trade Wednesday morning, as traders weigh concerns about tight supplies against signs of weak demand.
In electronic trading, Chicago Board of Trade futures for December delivery are up 1 3/4 cents, or 0.2%, at $7.40 a bushel.
December corn is down 7.5% since the end of August as speculative funds have sold futures to gradually reduce their large net position betting on higher corn prices. Corn prices hit an all-time high in August, raising concerns that too much demand could be choked off, and expectations for the U.S. corn harvest improved somewhat. Negative technical signals added to pressure for corn.
Now, corn traders are still trying to determine whether the supply-and-demand balance for the grain suggests that prices still need to go higher or lower.
Some traders think further price declines would invite too much demand, straining the tight supplies available after the severe U.S. drought reduced the country's corn output.
But traders also say it isn't clear how much the lower prices of the last several weeks will stimulate demand. Corn export sales from the U.S. have remained lackluster. Some grain buyers in Asia say they are still waiting for lower corn prices before they step up purchases.
A senior official at South Korea's largest animal feed miller, Nonghyup Feed Inc., said the company prefers to wait out the recent decline in corn prices as it has already covered its requirements up until February 2013 and so it still has time to shop around.
"It's a balancing act and we're trying to find out if this is an equilibrium level [for prices] or indeed if we need to go higher or lower," said Bryce Knorr, an analyst with trade publication Farm Futures...
Source: Argentine Beef Packers S.A.
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