Chicago Board of Trade futures for July delivery settled down 3 3/4 cents at $5.51 1/2 a bushel, sinking to a 17-month closing low. December corn fell 12 cents to $5.10 a bushel.

July corn surged earlier in the session, but analysts said the rise was driven largely by market participants buying futures to exit bets that prices would fall. Some of those market participants had paired bets that July corn would fall with bets that either deferred corn contracts or wheat futures would rise, analysts said.

July corn traded up to an intraday high of $5.79 1/2 a bushel midmorning. But once the short-covering activity faded, corn gave up its gains in the face of strong pressure from outside markets, and weak export-sale data for corn.

"The doom-and-gloom mentality is kind of picking up momentum as we get in towards the weekend," said Shawn McCambridge, senior grains analyst with Jefferies Bache in Chicago.

Corn and other commodities were hit by weak U.S. jobs data released Friday morning, in a week when concerns about the euro-zone debt crisis and China's economy have also renewed investors' worries. Equities and crude oil traded lower, while gold rose.

Also, weekly export-sale data for corn missed analyst expectations Friday. The U.S. Department of Agriculture reported corn-export sales of 282,700 metric tons in the week through May 24, including 188,700 tons for delivery in the current marketing year. Analysts had expected total sales of 500,000 to 900,000 tons.

Rains in the Midwest this week also weighed on corn, though analysts say the U.S. crop still needs more rain to develop healthily.

"Basically weather is good for the corn crop...there are pockets of problems, but that's all they are," said John Kleist, senior analyst at ebottrading.com. "It's not a persuasive amount of damage that suggests there's going to be a significant crop loss at this time."

Wheat futures plummeted Friday, pulled down by macroeconomic woes and expectations for a good U.S. harvest of winter wheat. Analysts also said the premium for wheat over corn needed to narrow to encourage more usage in animal feed of wheat, instead of corn, which is in tighter supply.

CBOT July wheat fell 31 1/2 cents, or 4.9%, to $6.12 1/4 a bushel. Kansas City Board of Trade July wheat fell 28 cents to $6.37 a bushel.

Soybeans, like corn, gave up most of their midday gains before closing the session. Front-month soybeans ended higher as concerns remained about supplies tightening and demand rising, while deferred contracts fell.

CBOT July soybeans rose 4 1/4 cents to $13.44 1/4 a bushel. November soybeans fell 12 1/4 cents to $12.58 a bushel.

-By Owen Fletcher, Dow Jones Newswires; 312-750-4120; owen.fletcher@dowjones.com

(END) Dow Jones Newswires