Tumble on heavy fund selling as frost worries ease
Corn fell more than 3 percent and soybeans shed nearly 2 percent, continuing a recent slide triggered by harvest-time pressure and signs of eroding demand and crashing through key technical levels which the accelerated selling.
Wheat fell more than 1 percent, the seventh drop in eight sessions, following declines in corn and soy and as rain in the drought-scorched southern US Plains tempered fears of a steep drop in winter wheat seedings.
"For technical reasons, funds are finding less love for grains," said Dan Basse, analyst with AgResource Co.
"We've now seen a 70-cent break off of the highs in corn and $1 or so in beans and they're sick of losing money and they're getting out. When you go through 50-day moving averages it's a sell signal," he said.
Crop damage from freezing overnight temperatures in northern sections of the US Corn Belt appeared to be lighter than anticipated, adding to bearish sentiment in grains markets stemming from easing demand.
Uncertainty about frost damage to immature corn and soybeans had limited selling early in the week. But those concerns disappeared on Thursday.
"The temperatures were not as cold as forecast last night so there was less frost damage than had been expected. Yield reports out of Iowa and parts of Illinois have also been better than expected," said Alan Kluis, president of Kluis Commodities.
Chicago Board of Trade benchmark December corn fell 23-1/4 cents, or 3.2 percent, to a five-week low of $7.01 a bushel. Chart support held around $7 a bushel, a level that has not been breached by spot-month futures since Aug. 19.
Corn fell despite US export sales rising last week to a two-month high of 1.17 million tonnes, according to the US Agriculture Department, topping trade expectations.
November soybeans fell for the fourth straight day, shedding 24 cents, or 1.7 percent, to $13.58-3/4 a bushel, the lowest since Aug. 19. The contract closed below both its 50- and 100-day moving averages.
Investment funds were net sellers of an estimated 25,000 corn contracts on Thursday, the most since June 30, and an estimated 8,000 soybean contracts, trade sources said.
Drought persisted in the southern US Plains Wheat Belt. Scattered rain and milder temperatures offered some relief, but soil moisture reserves in much of the region remain well below normal, particularly in Texas, so far more rain was needed.
CBOT December wheat fell for the seventh time in eight sessions, sinking 1.2 percent to $6.96 a bushel after earlier touching a 5-1/2-week low of $6.86. Funds were net sellers of an estimated 3,000 wheat contracts on Thursday, sources said.
Copyright Reuters, 2011