U.S. corn prices set a nine-month low on Friday and posted their biggest weekly loss in 21 months on more selling in the wake of last week's U.S. government report that showed larger-than-expected stockpiles of the grain.
Soybeans fell to a 10-month low on fears of a potential drop in feed demand due to bird flu in China and seasonal pressure from the harvest of massive soy crops in South America.
Wheat rose on short-covering amid rumours of China buying U.S. soft wheat. Wheat also drew support from a drop in the U.S. dollar following disappointing U.S. jobs data. A weaker dollar makes U.S. wheat more competitive to holders of foreign currency.
At the Chicago Board of Trade, corn settled one cent lower at $6.29/bu. after falling to $6.26-1/2, the lowest spot corn price since June 25 (all figures US$). For the week, the spot contract fell 66-1/4 cents, or 9.5 per cent, the biggest weekly drop on a continuous chart since June 2011.
CBOT May wheat settled up five cents at $6.99/bu.
Traders were watching to see whether the corn market had found bottom after dropping more than $1 a bushel, nearly 15 per cent, since the U.S. Department of Agriculture in a quarterly report last week showed larger-than-expected U.S. stockpiles.
"We are still seeing follow-through selling from last week's report. It was really a bombshell, and there is a lot of length in corn in particular that still needs to exit," said Joe Vaclavik, president of Standard Grain in Chicago.
"Corn had been trading above $6.50 in the nearby contract since July. So that's 10 months of length that is now under water. There are a lot of positions that need to be liquidated," Vaclavik said.
After the CBOT close, data from the U.S. Commodity Futures Trading Commission showed large speculators slashed their net long position in CBOT corn by 70 per cent, the biggest weekly cut on record, in the week to April 2.
Front-month corn fell to new multi-month lows on four of five sessions this week, including Friday. The price break appeared to draw export business, with USDA confirming sales of 120,000 tonnes of U.S. corn to unknown destinations for delivery in the next marketing year.
Bird flu fears pressure soybeans
Soybean and soymeal futures fell on worries that bird flu might spread in China and reduce feed demand in the world's top soy importer.
CBOT May soybeans ended down 10-1/4 cents at $13.61-3/4 a bushel, after falling to $13.54-1/2, the lowest spot soybean price since June 6. Spot soymeal futures also hit a 10-month low.
Chinese authorities slaughtered more than 20,000 birds at a poultry market in Shanghai on Friday as the human death toll from a new strain of bird flu mounted to six, spreading concern overseas.
Seasonal pressure from the soy harvest in Brazil and Argentina further pressured prices, although rains stalled the harvest in Argentina's south and central grain belt over the past week.
"You have got a record crop in South America that is having trouble getting out of the country. But it is going to get out eventually, and that is overwhelmingly bearish factor for both old-crop and new-crop beans," Vaclavik said.
As with corn, funds have been liquidating long positions in soybeans since USDA's stocks report, which showed larger than expected stocks of soybeans and wheat.
For the week, CBOT soybeans fell three per cent, a second consecutive week of decline, while wheat rose 1.6 per cent.
Along with short covering, some said wheat drew support from concerns about dry conditions and poor crop ratings in the southern U.S. Plains, along with cold weather in Europe.
"The wheat gave a good showing this week. The supply side is back in traders' minds," said Mike Zuzolo of Global Commodity Analytics.
-- Julie Ingwersen covers the markets for Reuters from Chicago. Additional reporting for Reuters by Ivana Sekularac in Amsterdam and Naveen Thukral in Singapore.