Chicago | Reuters — U.S. wheat and corn futures fell on Friday for a second straight session as traders liquidated long positions ahead of a U.S. holiday weekend, and following a fund-driven rally seen as lacking fundamental drivers, analysts said.
Soybeans also extended losses from Thursday, pressured by falling vegetable oil prices in Asia and an advancing soybean harvest in Brazil.
Chicago Board of Trade March wheat settled down 6-3/4 cents at $4.41 per bushel. March corn was down 5-1/4 cents at $3.68-1/4 a bushel, and March soybeans were down 11-1/4 cents at $10.32-1/2 a bushel.
Wheat and corn closed poorly a day earlier, reversing to the downside after the March contracts in both markets set multi-month highs.
That bearish technical signal came after a run-up in open interest in CBOT corn futures, indicating an influx of new long positions that left the market vulnerable to long liquidation.
“This is just follow-through liquidation,” said Tom Fritz, a partner at EFG Group in Chicago “The spec got too long, too fast.”
The U.S. Commodity Futures Trading Commission’s weekly Commitment of Traders report, released after the close of the market on Friday, showed speculators expanded their net long position in CBOT corn futures to nearly 81,000 contracts in the week to Feb. 14, their biggest net long singe July.
For the week, CBOT wheat fell 1.8 per cent, March corn fell 1.7 per cent, and March soybeans fell 2.5 per cent.
Traders await fresh acreage forecasts from the U.S. Department of Agriculture’s annual outlook forum next week. Preliminary forecasts released by USDA in November projected a drop in U.S. corn plantings for 2017 and an increase in soybean acreage.
“Fundamentally, the grain setback makes plenty of sense, with no real impetus for corn especially to continue its unexpected rally, other than just to keep up with beans in the 2017 U.S. acreage fight,” brokerage INTL FCStone said in a note to clients.
U.S. wheat was bypassed in an international tender on Friday when Egypt’s state grain buyer, the General Authority for Supply Commodities (GASC), bought 360,000 tonnes of lower-priced Russian, Ukrainian and Romanian wheat.
The CBOT will be closed on Monday for the Presidents Day federal holiday.
— Julie Ingwersen is a Reuters correspondent covering grain markets from Chicago. Additional reporting for Reuters by Naveen Thukral in Singapore and Gus Trompiz in Paris.