U.S. corn futures finished mixed Friday, with nearby contracts rising on improved demand.
International grain users increased purchases following recent price declines, with South Korean buyers making their first major purchases in nearly two months. Traders worry the demand will drain inventories that are already tight.
The U.S. Department of Agriculture announced exporters sold 271,200 metric tons of corn to "unknown destinations" for delivery during the next marketing year.
Grain traders are keeping a close eye on demand after prices reached record highs last month on steady buying from foreign countries and domestic producers of livestock and ethanol. The increase in demand follows a recent slowdown in export sales attributed to the rise in prices.
Further support was generated from the potential for weather problems this spring to trim production prospects. A tight supply scenario in the U.S. places increased pressure on U.S. farmers to produce bumper crops in 2011, with the federal forecasters already projecting supply tightness despite farmers planting more acres than a year ago.
However, futures ended well off initial highs, as traders took profits on prior gains attributed to broader-based selling associated with the bounce in the U.S. dollar.
Ending lower were deferred-month contracts that represent crops planted in the spring and harvested in fall, as they were unable to sustain advances amid the major strides farmers are making in seeding corn in the western Midwest, said John Kleist, senior analyst with ebottrading.com.
CBOT July corn ends up 0.2% at $6.82/bushel while new-crop December falls 0.6% to $6.27.
US wheat futures finished lower as U.S. dollar strength pressured commodities. The rising dollar fueled concern about reduced demand, as it makes dollar-denominated commodities less attractive to foreign buyers. Talk of beneficial rains in dry areas of the southern U.S. plains states and in Europe applied further pressure, analysts said. CBOT July wheat fell 7 3/4 cents to $7.27 3/4 a bushel; KCBT July dropped 6 3/4 cent to $8.69 1/2, and MGE July slid 4 1/2 cents to $9.00 1/4.
U.S. soybean futures stumbled Friday, as an initial push higher failed to gain traction after a rebound in the U.S. dollar guided prices lower on broader-based speculative selling. The market garnered further pressure from slumping demand, with slower exports and a drop in domestic use adding to defensive tone, said John Kleist, analyst with ebottrading.com.
Also adding pressure was the threat that adverse planting conditions for corn, rice and cotton crops across parts of the central U.S. and the Delta may lead to additional soybean acres. CBOT July soybeans settled down 13 1/4 cents, or 1%, at $13.29 1/2/bushel.
CBOT July soymeal ended 2.2% lower at $345.40/short ton and July soyoil dropped 0.6% to 56.14c/pound. Nearby U.S. rice futures closed unchanged as pressure from the rising dollar and falling wheat prices offset concerns about the U.S. crop and its planting having been delayed due to rains in the South. CBOT July rice finished at $13.98 1/2 per hundredweight.
Ethanol futures finished little changed with corn, the primary feedstock for the biofuel. Ethanol for July delivery rose 1.3 cents, or 0.5%, to 2.504 per gallon. Oat futures slipped on profit-taking and pressure from the stronger dollar. Oats for July delivery ended down 2 1/2 cents, or 0.7%, at $3.44 1/2 a bushel.