U.S. corn fell for the first time in nine sessions on Thursday, shedding nearly one per cent and snapping the longest rally since June, as traders locked in profits and futures entered overbought territory.
Soybean and wheat futures also declined at the Chicago Board of Trade (CBOT), with soybeans hitting technical resistance despite the best U.S. export sales of the oilseed in eight months.
Agriculture futures bucked a broad commodities rally as crude oil jumped more than one per cent and the Thomson Reuters Jefferies index of 17 commodities rose to the highest point since Dec. 3.
Corn "had a pretty decent run to the upside mainly because people were so oversold. But we're up into overbought conditions," said Shawn McCambridge, an analyst at Jefferies Bache in Chicago.
Corn futures for March delivery settled 6-3/4 cents lower at $7.24-1/2 per bushel. The contract had gained in each session since hitting a six-month low on Jan. 7 before rising above 60 on a relative strength index (RSI) chart, which is considered overbought and an indication to sell.
Early in the session, the U.S. Agriculture Department pegged export sales of corn last week as the most in two months after foreign buyers purchased U.S. cargoes at the lower prices. No. 2 importer Mexico booked its largest buy since August.
"The likelihood of end users continuing to come in and extend coverage into this rally is unlikely, so we'll probably see the pace of sales run into the lower levels again very quickly," McCambridge said.
The U.S. government on Wednesday pegged the U.S. ethanol grind last week at the lowest in the history of the weekly dataset that started in June 2010. Abengoa Bioenergy also announced plans to temporarily halt ethanol production at two plants in Nebraska due to "unfavourable market conditions."
"We were due for a midweek pullback on the mildly overdone technicals. I think that was expected today, especially in light of the bad weekly ethanol data, and the confirmation that two Abengoa production facilities shuttered," said Mike Zuzolo, president of Global Commodity Analytics.
USDA pegged exports of soybeans as the largest since May in a week in which futures fell to roughly a two-month low on a continuous chart.
CBOT March soybeans settled 6 -1 4 cents lower at $14.30-1/4 per bushel after earlier hitting a one-month peak. But futures hit resistance at the 50-day moving average on a continuous chart as well as the 200-day moving average on a March chart.
CBOT March wheat shed 3-3/4 cents to $7.81-1/4 per bushel, losing ground for the first time in five sessions.
"I think we are seeing some market consolidation after strong gains," said Luke Mathews, a commodities strategist at the Commonwealth Bank of Australia.
Losses in wheat were capped as the drought deepened in the U.S. Plains region that grows most of the wheat in the U.S.
A series of rain showers helped ease drought conditions in parts of the U.S. over the last week, but drought expanded slightly in parts of the Plains, according to a weekly report released by a consortium of climatologists.
-- Michael Hirtzer reports on the grain and livestock commodity markets for Reuters from Chicago. Additional reporting for Reuters by Julie Ingwersen in Chicago and Colin Packham in Sydney.