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Farm markets end sharply lower

07/12/2013 @ 3:34pm

CHICAGO--U.S. corn and soybean futures fell Friday, backtracking previous gains on the prospect for improved weather conditions for developing crops across the U.S. Farm Belt.

"In a post U.S. Department of Agriculture report environment, the markets are closing out the week focused on weather," said Mike Zuzolo, president of Global Commodity Analytics and Consulting in Lafayette, Ind.

"With no threatening weather on the horizon to hinder yield potential, traders saw no need to boost prices ahead of the weekend."

The markets had rallied earlier in the week on growing concerns about heat in the Midwest affecting the U.S. crop. But a monthly supply and demand report from the USDA Thursday reaffirmed that domestic supplies are poised to swell this year thanks to historically high acreage.

That report, along with a more benign weather forecast that includes more rain and less heat in the Midwest prompted traders to reduce risk premium in the market, Mr. Zuzolo said.

"New crop" futures--such as the November soybean and December corn contracts that represents crops to be harvested in autumn were the focus of traders, as investors continue to brace for U.S. supplies to rebuild substantially in 2013.

Traders are acknowledging good summer weather could offset any issues from delayed seedings and relieve the strain of tight current supplies.

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