Tech-selling, weather sink corn futures
U.S. corn futures settled lower Friday, pressured by technical selling and a lack of a major weather-related threat to U.S. crops.
Chicago Board of Trade July corn futures settled down 11 1/2 cents or 1.7% at $6.61 3/4 a bushel.
Technical trading--or the use of past price levels to predict future price moves--had boosted corn earlier in the week. But the July contract then stalled at a resistance level on the historic price charts, keeping the contract's price within the downward-sloping channel where it has traded so far this year.
Technical traders saw the stalled rally as a negative signal and began selling futures, which continued Friday.
For technical traders, "there's no incentive to be long July corn at this point," said Bryce Knorr, an analyst with agricultural publication Farm Futures. Taking a "long" position means betting that prices will rise.
Generally favorable weather forecasts for this year's corn crop also led futures to fall. Traders earlier this week were worried about hot temperatures expected in the Corn Belt, but forecasts since then have mostly moderated.
"Right now the forecasts aren't terrible," Mr. Knorr said.
Weaker cash markets also pressured corn futures as prices eased for spot corn supplies in locations around the Corn Belt on Friday. In Cedar Rapids, Iowa, buyers of spot corn on Friday were paying $1.38 above the price of September futures, a premium five cents lower than the day before.
However, cash markets generally remain strong, as supplies have been tight since last year's U.S. harvest was devastated by an historic drought.
Wheat futures slid at the end of a choppy session, as traders continue to monitor the conditions of U.S. crops. Futures remain within their recent trading range, and analysts are watching for yield reports from the early harvesting of winter wheat crops in the southern Plains.
CBOT July wheat fell 2 1/2 cents or 0.4% to $6.98 a bushel. KCBT July wheat fell 1/2 cent or 0.1% to $7.36 1/2 a bushel. MGEX July wheat settled flat at $8.14 a bushel.
Soybeans fell on technical selling and the prospect of greater planted acreage of soybeans in the U.S. this year than originally expected, due to some corn farmers switching to the oilseed after a rainy spring prevented them from planting corn on time.
July soybean futures fell 4 1/4 cents or 0.3% to $14.93 1/4 a bushel.
Write to Owen Fletcher at email@example.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
June 21, 2013 14:53 ET (18:53 GMT)
DJ UPDATE: U.S. Corn Falls On Technical Selling, Favorable Weather->copyright