Corn extends slide in markets sell-off

CHICAGO: US corn futures fell 2 percent to nearly a three-month low on Wednesday on seasonal harvest pressure, signs of waning demand and jitters about the global economy.

Soybeans fell over 1 percent to nearly a 10-month low on improving harvest weather in the United States and continued long liquidation. Wheat tumbled over 2 percent to near a two-month low, snapping a three-day rally.

Worries about the euro zone debt crisis led to volatile equities markets and the dollar turned firm as crude oil and gold weakened.

"The outside markets provided no help at all and with the weather looking good for at least the next five to seven days I think there was some seasonal harvest pressure," an analyst said.

Traders were also positioning before the US Department of Agriculture's quarterly grain stocks report on Friday, and an accompanying report on US wheat production.

At 11:24 a.m. CDT (1624 GMT), bellwether new-crop December corn was down 11-3/4 cents per bushel at $6.40-1/2, below the 200-day moving average of $6.42-1/2. Technical analysts would view a close below that level as bearish for the corn futures market.

December corn futures broke the 200-day moving average, for the third time in four days.

US wheat for December was down 10 cents at $6.48-1/4 and November soybeans lost 20-1/2 cents at $12.42-1/2.

Seasonal harvest pressure increased on the corn and soybean markets as weather in the eastern US Midwest is expected to turn dry late this week.

Wet weather in the eastern Midwest had been slowing the drydown of mature crops and delaying harvest.

"They've been plagued by showers for about the past week but there is a front moving in and it should begin drying down by Friday and continue through at least midweek," said John Dee, meteorologist for Global Weather Monitoring.

Investors are hesitant to establish long positions in grains and oilseeds ahead of the USDA's stocks report on Friday, due to any signs that consumption may wane.

"There are expectations that the USDA may report a larger-than-expected supply on corn," said Lynette Tan, a grains analyst at Phillip Futures in Singapore.

Copyright Reuters, 2011