U.S. corn futures slipped for the 10th straight session on Thursday on crop-friendly weather in South America and expectations for rising global supplies, traders said.
Wheat futures fell as improving U.S. weather conditions and fund selling overshadowed strong weekly U.S. export sales data, and soybeans fell after weekly export sales fell short of trade expectations.
At the Chicago Board of Trade (CBOT), March corn settled down 3/4 cent at $6.94-3/4 per bushel. March wheat ended down 3-1/2 cents, or 0.5 per cent, at $7.32/bu., and March soybeans settled down five cents, or 0.4 per cent, at $14.18/bu. (all figures US$).
Corn's slide has pushed the market well into technically oversold territory. The nine-day relative strength index for the March contract settled at 24. An RSI of zero to 30 is one sign of an oversold market; a reading of 70 to 100 indicates an overbought market.
But open interest in CBOT corn futures has risen over the course of the February selloff, indicating that some traders are adding new short positions. Open interest in CBOT wheat has also increased this month, while prices have fallen.
"It continues to be a sentiment trade rather than a supply/demand trade," said Mike Zuzolo, president of Global Commodity Analytics in Lafayette, Indiana.
In a possible sign that the selloff may be losing momentum, March corn pared losses toward the closing bell and stayed inside of the previous day's trading range.
CBOT wheat was pressured by technical selling and the arrival this week of some much-needed moisture in the dry U.S. Plains winter wheat belt.
The weekly U.S. Drought Monitor report, issued by a consortium of state and federal climatologists, still showed severe drought across 82.5 per cent of the High Plains region, but the figure was down from 87.25 per cent a week earlier.
"We've had some moisture out west, which has eased some of the production concerns. And (crop) conditions overseas are generally favourable," said Shawn McCambridge, an analyst with Jefferies Bache in Chicago.
The U.S. Department of Agriculture reported weekly export sales of U.S. wheat for the current and new marketing year at 706,300 tonnes, a seven-week high that topped trade expectations for 275,000 to 400,000 tonnes.
But the data failed to confirm sales of U.S. wheat to Brazil, Britain or Russia that were rumoured last week.
"The attitude is that maybe it was just talk," McCambridge said. "Even though prices are oversold and we had decent export sales, we need to continue to see a decent pace of sales to keep USDA's forecast within reach."
Soybean export sales slow
Weekly export sales of U.S. soybeans fell short of expectations. The government pegged sales at 235,900 tonnes, including net cancellations of 109,100 tonnes for 2012-13 and net sales of 345,000 tonnes for 2013-14. Trade estimates were for 700,000 to 1.1 million tonnes.
Improving crop weather in South America continues to pressure soybeans as well, with Brazil poised to surpass the United States as the world's biggest soybean producer.
"We're certainly seeing improved forecasts for South America, forecasts for more rain in Argentina and in southern Brazil," said Rich Nelson, an analyst with Allendale Inc. in McHenry, Illinois.
"Also, we confirmed this morning in the export sales report we're at the inflection point, with soybean sales shifting back to South America," he said, alluding to the net U.S. sales cancellations for 2012-13.
Brazil's soybean harvest is 12 per cent complete, above the five-year average of seven per cent, analyst Celeres said Wednesday. However, the global soy trade remains concerned about logistics problems that could slow the movement of Brazilian soybeans to ports.
In Argentina, rains expected this weekend should bring relief to corn and soy crops stressed by recent dryness.
Traders were awaiting data on the pace of the U.S. soybean crush, due Friday from the National Oilseed Processors Association. The average estimate for NOPA's January crush among analysts surveyed by Reuters was 159.5 million bushels.
NOPA reported the December U.S. soy crush at 159.899 million bushels, its biggest monthly total since January 2010.
-- Julie Ingwersen covers ag commodity markets for Reuters in Chicago. Additional reporting for Reuters by Gus Trompiz in Paris and Mayank Bhardwaj in New Delhi.