CHICAGO (Dow Jones)--U.S. corn futures closed lower for the second
consecutive day Tuesday as the market pulled back from 30-month highs.
Corn for March delivery, the most-active contract, settled down 11 1/4 cents at $6.44 a bushel at the Chicago Board of Trade.
Widespread selling of commodities weighed on futures prices, as corn slumped with neighboring soybeans and crude oil, traders said. Crude oil is linked to the grains because ethanol is made from corn.
An announcement that the U.K.'s economy contracted 0.5% in the fourth quarter of last year, well below economists' expectations of a modest expansion, served as the catalyst that triggered selling across a host of commodities, said Bill Nelson, analyst with St. Louis-based Doane Advisory Services, a St. Louis-based agricultural advisory firm. The neighboring soybean market lost 2.1%.
"Sharp losses were posted in corn and soybeans today as funds liquidated their long positions," said Karl Setzer, analyst for Iowa-based MaxYield Cooperative.
Commodity index funds sold an estimated 13,000 corn contracts, a healthy amount, traders said.
Profit-taking added pressure to prices following strong gains. Corn futures topped two-year highs recently in an attempt to slow global demand and encourage farmers to expand plantings this spring to replenish low supplies.
Demand has not been impressive this week. Market participants on Tuesday remained concerned after weekly U.S. corn export inspections, issued Monday for the week ended Jan. 20, fell short of expectations, said Terry Reilly, Chicago-based grains analyst at Citigroup.
The U.S. Department of Agriculture will give traders their next update on
corn demand when it issues weekly export sales data Thursday. Total U.S. corn export commitments as of Jan. 13, 20 weeks into the marketing year, were 56% of the government's target for the year, slightly below the five-year average.
In other markets, ethanol futures retreated with the corn. Ethanol for March delivery finished down 4.1 cents, or 1.8%, at $2.296 per gallon at the CBOT.
Oat futures also weakened with the corn, soybean and rice markets. Oats for March delivery dropped 6 cents, or 1.6%, to $3.81 a bushel at the CBOT.
