Corn futures on the Chicago Board of Trade shed 2 percent of value on Thursday on profit-taking pressure, traders and analysts said. "It was just profit-taking across the floor. Nothing has changed fundamentally and there wasn't any big fund long liquidation," said Shawn McCambridge, analyst for Prudential Financial.
"These markets have been overbought for some time and they're just setting back," he said.
Traders said early gains began eroding when the December contract rallied to resistance at $3.65 per bushel, within a couple cents of its contract high of $3.67 and a 10-year high. CBOT corn closed 6-3/4 cents per bushel lower to 1-1/2 higher, with December down 6-3/4 at $3.51-1/2 per bushel. "There wasn't big trade in the corn pit, most of it was on the screens and the volume wasn't heavy," a CBOT floor trade source said.
Volume was estimated at 261,324 futures and 56,128 options, down from the 342,783 futures traded on Wednesday. Traders and analysts said that over the long term, speculative buying was expected to continue amid outlooks for dwindling stocks of corn as demand from the export, livestock and ethanol sectors remain brisk.
A big number for corn in USDA's weekly export sales report gave the market an early boost but persistent volatile price swings in corn futures are likely.
"There wasn't any fundamental change but there was some selling in other markets like crude oil and cotton so that may be part of it," said Terry Reilly, analyst for Citigroup.
USDA early Thursday said export sales of US corn last week totalled 1,395,600 tonnes, above trade estimates for 900,000 to 1,100,000 tonnes and Israel bought 80,000 tonnes of US corn overnight.
Traditional seasonal harvest pressure failed to materialise this year as investment funds continued to buy corn futures on outlooks for the corn supply to shrink to the lowest level in three decades later next year.
US farmers are nearly through harvesting the 2006 corn crop but some snafus are surfacing in the remaining harvest in the eastern portion of the Midwest crop region.
Rain and cooler weather continues to delay corn and soyabean harvest in the southern and eastern areas of the US Midwest. Meteorlogix weather said on Thursday.
The cash basis bids for corn in the Midwest late on Wednesday were mostly steady amid light farmer selling. Technical traders were watching the December contract trade above all key moving averages.
Oat futures were down 10-3/4 cents to up 2-1/4 cents following the weakness in corn. December oats closed down 10-3/4 at $2.51-1/2. Volume was heavy estimated at 4,516 futures and 473 options, more than double the 2,149 futures that traded on Wednesday.
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