US corn futures fall three percent

US corn futures fell 3 percent on Friday after a surge in the dollar and a downturn in crude oil triggered additional long liquidation, adding to losses from Thursday during the biggest commodities sell-off since 2008. A pickup in the seeding pace of this year's US corn crop added pressure as weather conditions in some areas of the Midwest improved.
Noted crop forecaster Informa Economics told clients on Friday that it had raised its estimate of US corn plantings to 91.9 million acres from 91.758 million in March. The US Department of Agriculture has forecast 92.2 million acres. But traders said the focus was on other markets, especially crude oil and the dollar.
Large speculators appeared to be exiting long commodities/short dollar positions that had helped lift corn to a record high and soy and wheat to the highest levels since 2008. Traders estimated that funds sold 30,000 corn contracts in the last two sessions.
Front-month corn at the Chicago Board of Trade settled Friday at $6.82-3/4 a bushel, hitting its lowest price since March 31 and marking a drop of $1 in the four weeks since the contract set an all-time at $7.83-3/4, on April 11. Most-active July corn ended down 22-1/2 cents at $6.86-1/4. For the week, CBOT corn fell 9.4 percent, its biggest weekly drop since October.
Wheat futures fell 5.8 percent for the week and soybeans fell 4.9 percent. However, wheat and soybeans both closed higher on Friday following a choppy session. CBOT July wheat ended up 5-1/2 cents at $7.59-1/2 per bushel and July soybeans ended up 4-1/4 cents at $13.26. Trading volume was light, with the daily tally for both wheat and soybeans about 15 percent below the 30-day average. Corn volume was about 5 percent off the 30-day average.
Corn rallied early but came under pressure later in the session, following a setback in crude oil as the dollar rose. The dollar rallied after a German news report, later denied, suggested Greece had raised the possibility of leaving the euro zone. "There is so much uncertainty right now. Crude began crashing again late and the dollar came back so dramatically," said Rich Feltes, vice president of research with R.J. O'Brien.
"The important themes are that the tail wind from capital inflows to commodities as a preferred asset class - all of that is on hold until we can stabilise and establish an uptrend," Feltes said. Corn was also hit by chart-based selling as the bellwether July contract fell below its 100-day moving average at $6.91 a bushel, a key level for technical traders.
Earlier in the day, grains and other commodities got a boost after data showed that US employment increased by more than expected in April, with employers adding jobs at the fastest monthly pace in five years. The data helped dampen concerns by investors over the health of the world's biggest economy. Wheat drew support from concerns about dry conditions in the southern US Plains, as well as France and Germany. Hard wheat futures at the Kansas City Board of Trade posted the biggest gains, with CBOT wheat following.
An annual crop tour of Kansas, the top US winter wheat grower, on Thursday projected the state's winter wheat output at 256.7 million bushels, with an average yield of 37.4 bushels per acre. If realised, the wheat crop would be the smallest in Kansas since 1996.