Corn, soybeans fall hard Friday
U.S. corn futures fell 1.9% Friday on renewed worries about weak export demand and technically based selling.
Corn has been pressured for weeks by concerns that high prices have curbed demand for the grain, and those concerns resurfaced Friday, as export demand remained soft overall.
Corn for March delivery at the Chicago Board of Trade ended down 14 1/4 cents, or 1.9%, to $7.37 1/4.
The market is retracing a recent price rally, with traders viewing the market as overbought in the absence of fundamental strength in demand.
The weak export picture was reaffirmed Thursday, when the U.S. Department of Agriculture reported weekly sales of only 47,400 metric tons. Analyst guesses had ranged from 300,000 to 500,000 tons.
"Corn export demand is crummy," said John Kleist, senior grains analyst with EBOT Trading in Lakemoor, Ill.
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The corn market has digested a steady stream of bad news, from consecutive weeks of lousy export sales to continued strength in export sales from rival Brazil, Mr. Kleist said.
The sales reflect the reluctance of foreign importers to buy U.S. corn at historically high prices.
Losses on Friday were accelerated by technically based chart selling following the market's slide below a major moving average. Once the most active March contract penetrated chart support at the contract's 50-day moving average, a bearish signal, traders were encouraged to shed risk, analysts said.
The technical weakness opened the door for the drubbing of the corn market, said Shawn McCambridge, senior grains analyst with Jefferies Bache in Chicago.
Soybean futures stumbled Friday as well, succumbing to end-of-week profit- taking after rallying 8% in the past four sessions. Beans lack any fresh news to extend rallies, and news of export sales to China were just confirmation of business already priced into the market earlier in the week, traders said.
Chicago Board of Trade soybeans for January delivery declined 19 cents, or 1.3%, at $14.72 1/4.
Wheat futures stumbled in unison with corn. The grains often trade in tandem because both can be used in animal feed.