US wheat futures fell 2 percent on Friday as investors liquidated commodity holdings due to further concerns about the global economy. Corn dropped 1-1/2 percent. The spot July contract was down 4-1/2 percent for the week and over 16 percent from the record high of nearly $8 per bushel set just two weeks ago.
"Grains continue to see influence from outside markets, there's continued general commodity liquidation and there's a seasonal downtrend," said Jason Roose, an analyst with US Commodities, Des Moines, Iowa. Wheat posted its fourth straight week of losses as crop weather improved in Europe and the US harvest advanced. CBOT wheat has not seen a four-week decline since June-July 2009 when it fell for six straight weeks.
Soybean futures ended firm on end-of-week short-covering and was flat for the week. CBOT wheat for July delivery closed down 13-1/4 cents at $6.35-3/4, July delivery corn was down 10-1/2 at $6.70 and soy for July was up 2-1/2 at $13.20-1/4.
Traders were concerned that this week's collapse in grain prices would be repeated next week due to the firm dollar, lower precious metals and falling equities markets. "The outside markets were adding concern. No one wanted to be long going into the weekend in case something happens again next week," said Shawn McCambridge, analyst for Prudential Bache Commodities.
US stocks posted three days of losses on worries about Greece's austerity plan, and the euro declined against the dollar for a third straight session. Wheat futures have been technically broken with spot July below all key moving averages and floundering near its lowest price level in a year.
July corn closed down for the day on another late sell-off, leading to calls for more declines even though the contract stayed above support at its 200-day MA of $6.54-3/4. July soybeans broke support at the 200-day moving average of $13.22-3/4, another bearish technical signal.
Corn futures sank to a three-month low on Thursday, notching their biggest two-day drop in 2-1/2 years before staging a late recovery that day to close higher. But there was no follow-through despite an increase in end-user demand as South Korea stepped into the market and China again appeared to be buying corn.
Two weeks ago, US corn prices soared to a record high $7.99-3/4, leaving the market vulnerable to an abrupt technical setback. Analysts said corn has the tightest supply outlook among grains with supplies expected to fall to a 15-year low. So further losses may spark buying by feeders, ethanol makers and exporters.
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