Corn futures at the Chicago Board of Trade fell as speculative commodity funds embarked on a selling spree that sent prices to new life-of-contract lows.
The most-active July corn futures dropped 4.5 cents, or 2.1%, to $2.09 a bushel. The December contract closed down 4.25 cents, or 1.8%, at $2.265.
The lower theme was consistent throughout the trading session, with large speculative traders exiting previously purchased contracts and establishing new short positions in the process, amid favorable planting conditions and technical weakness.
The absence of any significant supportive features and the subsequent inability to hold key technical support levels during the trading session uncorked a wave of speculative selling pressure, as market participants
viewed downside movement as the path of least resistance.
Yesterday's losses were the culmination of bearish fundamental inputs, with abundant supplies in the U.S. and world markets, as well as a general short-term easing of concerns for weather-delayed plantings in the U.S. Corn Belt pressuring prices, said Shawn McCambridge, senior grains analyst with Prudential Financial in Chicago.
Weather forecasts projecting warmer and drier conditions for the heart of the U.S. Corn Belt this week, following delays due to wet, cold conditions last week, were expected to provide excellent opportunities for farmers to keep corn plantings moving at an above-average pace.
A fast planting pace is particularly important to the corn market.
Historically, corn crops planted ahead of the average pace improve the chances of normal to above-normal yields. An early developing crop manages to move through its critical stages of growth ahead of the stressful heat usually associated with late-June and early-July weather, added Mr. McCambridge. The Agriculture Department reported corn plantings were 52% complete as of Sunday, compared with the five-year average of 45% for plantings at this time. In addition, export demand for U.S. corn is seen as a key to corn's price weakness. U.S. corn exports have been poor.
In other commodity markets:
CRUDE OIL: Futures prices on the New York Mercantile Exchange rose 2.4%, pushing past the psychologically important $50-a-barrel level and sending a signal that last week's drop in prices was overdone. The most-active June contract's failure to breach $49 earlier in the day created what some saw as a buying opportunity. The contract rose $1.20, to $50.92 a barrel.
ORANGE JUICE: Futures on the New York Board of Trade fell as selling by speculators was featured, floor sources said. There was a bit of commercial buying that entered the market, but the speculators were said to have overwhelmed the commercial buying interest. Frozen concentrated orange juice for May delivery fell 2.8 cents a pound, to 91.70 cents.