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Corn futures slip on sluggish exports

11/02/2012 @ 3:16pm

Corn futures fell Friday, pressured by the latest in a string of lackluster export-sales reports for the U.S. crop.

Corn for December delivery declined 11 1/2 cents, or 1.5%, to $7.39 1/2 a bushel at the Chicago Board of Trade.

Prices dropped after the U.S. Department of Agriculture reported export sales of 167,900 metric tons of corn for the week ended Oct. 25. The tally was at the low end of analysts' estimates that ranged from 110,000 to 400,000 tons.

The sales reflected the reluctance of foreign importers to buy U.S. corn at historically high prices for the grain, and marked the second weekly report in a row that drove futures sharply lower.

Corn futures leapt to an all-time closing high of $8.31 1/4 in August as the worst drought in the Farm Belt in decades stunted crops. But prices have fallen about 11% since then, amid sluggish demand from foreign importers, ethanol producers, and livestock and poultry companies.

Countries including China and Japan have bypassed U.S. corn, with some turning to corn from Argentina and Brazil to meet their needs, analysts say.

Front-month U.S. corn futures have been stuck in a trading range of roughly $7.30 to $7.70 a bushel for the past month.

"Exports have been the reason corn futures have had a tough time getting up and going for the past couple of months," said Jack Scoville, vice president of advisory and brokerage firm Price Futures Group in Chicago. "It's a simple fact U.S. prices are not competitive."

U.S. export sales for the first eight weeks of the crop year that began Sept. 1 are down 48% from the same period a year earlier.

Corn futures also were buffeted Friday by investors seeking to curb risk ahead of crop reports coming next week from the USDA. The production and supply-and-demand forecasts will provide fresh estimates of the size of this fall's corn and soybean harvests, which are largely complete.

Private crop forecasters INTL FCStone and Informa Economics this week projected higher production figures for the corn crop than the USDA estimated a month ago.

U.S. soybean futures also slumped Friday, pressured by speculative profit-taking on recent gains. Traders are bracing for a potential increase in government estimates for U.S. supplies after private forecasters raised their projections this week.

Chicago Board of Trade soybeans for November delivery settled down 31 1/2 cents, or 2%, at $15.27 a bushel, and soybeans for January delivery finished down 33 1/4 cents, or 2.1%, to $15.26 3/4.

U.S. wheat futures declined along with other grain markets and were pressured, like corn, by a lackluster export-sales report. Traders were disappointed export demand didn't increase for the U.S. crop following production declines and tightening supplies in other wheat-producing countries.

December wheat futures ended down 4 cents, or 0.5%, at $8.64 1/2 a bushel at the Chicago Board of Trade. Kansas City Board of Trade December wheat rose 1/4 cent, or 0.03%, to $9.08 3/4 a bushel. MGEX December wheat finished down 3 cents, or 0.3%, at $9.40 1/4 a bushel.

Write to Andrew Johnson Jr. at andrew.johnsonjr@dowjones.com
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(END) Dow Jones Newswires
November 02, 2012 16:04 ET (20:04 GMT)
DJ US GRAIN AND SOY REVIEW: Corn Slips Amid Sluggish Exports->copyright

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