Corn closed lower – just –for a third successive session as forecasts for better US weather, and technical factors, denied the grain the support given to soybeans and wheat.

Chicago corn suffered only a small drop, declining 0.25 cents to $3.64 ½ a bushel for March delivery and by 0.5 cents to $3.75 a bushel for May.

But it was notable compared with gains in its two major trading partners, which gained on position-covering ahead of a key US Department of Agriculture report on Wednesday.

Managed funds were net short of both Chicago soybeans and wheat as of last week. So taking a more cautious position ahead of the USDA crop supply and demand report is likely to encourage short covering.

'Warmer and very dry trend'

The same is not so true of corn, for which funds had already built up substantial net longs, of nearly 24,000 positions, since mid-February.

Then, there is the potential of spring not being so wet after all, so meaning that the delays to US corn plantings may not prove too severe.

"Weather models now are suggesting a warmer and very dry trend next week, which has taken some of the steam out of this buying," Darrell Holaday at broker Country Futures said.

Furthermore, some analysts are warning that an unusual resurvey of the 2009-10 US corn crop due in Wednesday's report, to correct for the impact of late harvest, may not produce the revision lower that investors have expected.

"The trade generally looks for production to be down 25m-50m bushels," US Commodities said.

"History indicates that big crops get bigger and that production should go up by 50m-75m bushels."

'Strongest pit'

The plus points were for soybeans. More US corn plantings, for instance, should weather turn out relatively fry probably means less soybean sowings.

Meanwhile, over the weekend Ning Gaoning, the chairman of Chinese grain trader Cofco, said that the strong South American soybean harvests were already factored into market prices.

"Funds are up to 3,000 soybean [contracts] bought on the day, enabling beans to remain the strongest pit on the floor," Vic Lespinasse at GrainAnalyst.com said towards the close of play.

Chicago soybeans for March added 5.75 cents to $9.40 ½ a bushel, with the May lot up 5.25 cents at $9.48 a bushel.

Mixed bag

Wheat, favoured by short coverers, ended up 2.25 cents at $4.84 ½ a bushel in Chicago for March delivery and up 1.5 cents at $4.95 a bushel for May.

The improvement was reflected in London, where March wheat added £0.45 to £92.75 a tonne.

Paris wheat was held back by a stronger euro, which main ground on continuing hopes for the eurozone avoiding a major panic from Greece's sovereign debt crisis. The March lot closed down E2.50 at E116.75 a tonne, although this fall was unrepresentative in its extent for the rest of the contracts, most of which lost E0.50 or so.