US corn fell to a five-week low on Friday, dropping over 4 percent for the week as export demand for corn waned and on jitters over the fate of the global economy as the euro zone debt crisis kept dominating financial headlines. Analysts said that although US corn prices have slipped from recent peaks, regular importers in Asia were increasingly looking to other markets for less expensive feed grains, including corn from Ukraine and feed-grain wheat from Australia.
Soyabeans and wheat ended firm in a late bout of technical short-covering as each market was oversold after the steep slide of prices on Thursday. Corn slipped for the seventh time in eight sessions as demand sagged for the popular yellow grain used for feed and fuel. Corn was following through after it plunged the most in nearly two months on Thursday after a US government export report revealed a paltry export sales pace. Spot corn prices are now down nearly 25 percent from the record high of $7.99-3/4 per bushel set on June 10.
"There has been a change in market sentiment. The market is now defensive because we're seeing below normal demand in exports and there is an increase in feeding wheat instead of corn," said Shawn McCambridge, analyst for Jefferies Bache. The US Department of Agriculture (USDA) said on Thursday corn exports fell to a 13-month low last week as rival suppliers offered cheaper corn and other feed grains.
Sales in the first two weeks of November, traditionally a strong demand period for corn from the world's top supplier, were the slowest in more than 20 years, according to US Department of Agriculture data. CBOT corn for December delivery was down 4-1/4 cents per bushel at $6.10-1/4, January soya was unchanged at $11.68-1/4 and December wheat was up 5-3/4 cents at $5.98-1/4.
Investors remained nervous about the euro zone debt crisis even as the dollar eased against the euro on speculation the European Central Bank may start lending to the International Monetary Fund to bail out bigger euro zone economies. "A lot of users are sitting on the sidelines, scared to death," said Roy Huckabay, analyst for The Linn Group.
In contrast to corn, soyabeans found underpinning from brisk export demand, especially from China, the world's largest soya importer. USDA said exporters sold 124,500 tonnes of US soyabeans to China, the top soya importer, for 2011/12 delivery. It was the second large sale to China in two days. China stepped up soyabean purchases this week to fill state reserves, buying more than 500,000 tonnes to take advantage of lower global prices, and traders said more deals were likely.
Fallout from bankrupt futures trader MF Global had traders on edge and some said they were getting out or planned to get out of the futures trading business. And market analysts will be looking for signs in Friday's weekly Commodity Futures Trading Commission (CFTC) report that the firm had liquidated positions during its bankruptcy proceedings.