US wheat futures fell 3 percent to a two-month low on Thursday as traders steered clear of the buy-side before the release the following day of a closely watched US government crop report. Wheat was down nearly 6-1/2 percent for the week, on track for its biggest weekly decline in six months. "It was liquidation-only trade ... certainly a risk-off day," said Roy Huckabay, analyst for The Linn Group, a Chicago-based brokerage.
Corn dropped for the fourth day in a row to a two-month low despite confirmation that the United States had sold corn to China. Corn was headed for a fall of nearly 7 percent for the week, the biggest weekly drop since mid-January. CBOT May wheat was down 18-1/4 cents per bushel at $6.12-1/2 per bushel, May corn fell 16-1/4 cents to $6.04 and May soyabeans lost 12 cents at $13.55-1/2.
"There was further liquidation and follow-through selling on bearish technicals. They've torn up the corn charts, taking out support levels," said Dan Cekander, analyst for Newedge USA. "There was a lot of evening up ahead of the report."
Commodity funds have sold nearly 60,000 CBOT corn contracts this week, equivalent to almost 300 million bushels or almost 2 percent of anticipated US corn production this year, according to CBOT trade sources. The sales volume is equivalent to nearly the size of Missouri's corn crop last year. Corn options underwent heavy trading, with turnover estimated at 200,000 contracts.
Soyabeans slipped for the third day in a row, notching their biggest weekly slide in two months, as investors also chose to exit some of their record long holdings in the oilseed in broad-based, risk-off dealings before Friday's key reports. Soya had held firm relative to corn in early dealings in a competition for acreage, with farmers on the cusp of spring plantings for the 2012 crop year. With global soya stocks depleted following a drought in South America that trimmed production, the market is trying to buy acres from corn.
The trade expects the USDA to forecast this year's corn plantings near 95 million acres (38.4 million hectares), the most since 1944, soyabean area at just over 75 million acres, slightly more than last year and total wheat acreage at nearly 57.5 million, or roughly 3 million more than last year. The USDA said on Thursday that export sales of US corn last week totalled just over 150,000 tonnes.