CHICAGO: US wheat futures fell one percent to a two-month low o n T hursday as traders steered clear of the buy-side before the release on Friday of a key US government report.
Corn dropped for the fourth day in a row to a two-month low despite confirmation the US had sold corn to China. Corn was headed for a fall of nearly 7 percent for the week, which would make the biggest weekly decline since mid-January.
"There was further liquidation and follow-through selling on bearish technicals, they've torn up the corn charts taking out support levels," said Dan Cekander, analyst for Newedge USA.
"There is a lot of evening up ahead of the report."
Soybeans inched higher, reversing two days of declines in a competition with corn for acreage, with farmers on the cusp of spring plantings for the 2012 crop year. With global soy stocks depleted following a drought in South America that trimmed production, the market is trying to buy acres from corn.
At 10:32 a.m. CDT (1532 GMT) CBOT May wheat was down 10-1/2 cents per bushel at $6.20-1/4 per bushel, May corn was down 3 cents at $6.17-1/4 and May soybeans were up 2 at $13.69-1/2.
Analysts and traders said the broad-based selling in wheat and corn was tied to hesitancy to hold a big long position in either commodity before the release at 7:30 a.m. CDT (1230 GMT) on Friday of the US Department of Agriculture's (USDA) prospective plantings and quarterly stocks reports.
FOCUS ON FRIDAY'S USDA REPORT
The trade is expecting USDA to forecast this year's corn plantings near 95.0 million acres, the most since 1944, soybean area at just over 75.0 million, slightly more than last year and total wheat acreage at nearly 57.5 million, or roughly 3.0 million more than last year.
The combination of huge sowings, early plantings and outlooks for good crop weather into the heart of this year's growing season is leading to prospects for bumper crops which could pressure prices.
Pressure on the corn market surfaced despite more information confirming persistent Chinese buying of US corn.
"There is some underlying support to spot corn on rumors China booked some more corn overnight," Cekander said.
The USDA confirmed trade talk that China bought 120,000 tonnes of US corn and also announced a sale of 120,000 tonnes to an unknown destination which likely is for China as well.
But weekly USDA export sales data threw cold water on any attempts to rally the corn futures market.
USDA said Thursday that total export sales of US corn last week at just over 150,000 tonnes were a marketing year low and the lowest for one week in nearly eight years.
The export sales report showed a two-week high for soybean export sales but a two-week low for wheat export sales.
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