GRAINS-Corn, soybeans slide on profit-taking, technical selling

Fri Dec 7, 2012 3:44pm EST

* Corn down 1.9 percent on dull demand, rising stocks
    * Soy off on technical selling, improved S.America weather
    * Firm U.S. dollar adds pressure in grains

 (Updates with closing prices, weekly trends)
    By Karl Plume
    CHICAGO, Dec 7 (Reuters) - U.S. corn futures fell to a
2-1/2-week low on Friday in the steepest slide in nearly a
month, pressured by technical selling and concerns that
stockpiles are growing as elevated prices blunt demand.
    Soybeans retreated from one-month peaks and posted their
biggest drop in three weeks on chart-based selling and
profit-taking following four days of gains. Wheat followed corn
and soybeans lower.
    A firm dollar, which increases costs for those
holding other currencies, further weighed on grains.
    "Technically, we pushed up to some tough resistance. When we
were at the bottom of the recent trading range, our corn exports
and our demand grew. But when we got to the top of the range,
they dwindled," said Don Roose, president of U.S. Commodities.
    "The dollar continues to move higher and the ethanol margins
are deep in the red. Weather in the feeding areas is
non-threatening, so (livestock) efficiency is up," he said.
    Chicago Board of Trade March corn fell 14-1/4 cents,
or 1.9 percent, to $7.37-1/4 a bushel, the steepest drop since
Nov. 12. Selling accelerated as the contract broke below its
50-day moving average around $7.48.
    The contract was down 2.1 percent from a week ago, the
biggest weekly decline in six weeks.
    CBOT January soybeans dropped 19 cents, or 1.3
percent, to $14.72-1/4 a bushel. But the contract added 2.3
percent in the week, the third straight weekly gain.
    January soy briefly rose above its 50-day moving average of
$14.96 but failed to hold the gains due to a lack of
follow-through buying.
    Traders were also eyeing the contract's looming "death
cross", a bearish technical indicator referring to the 50-day
moving average breaking below the 200-day moving average.
    Losses in the front-month soybean contract were deepened by
scheduled rolling of long positions by index funds to the next
contract month. The "Goldman Roll" is expected to continue for
four more days.
    CBOT March wheat lost a penny at $8.61 a bushel. The
contract's 0.5 percent weekly decline was the first drop in
three weeks.
    A monthly U.S. Department of Agriculture report next week is
expected to show U.S. corn stocks grew by 2.5 percent due to
poor export demand, a Reuters poll showed, although stocks will
remain the smallest in 17 years due to a crop-crippling drought
this year. 
    Soybean stocks are seen tightening to the lowest level since
the 2003/04 marketing year (Sept/Aug) amid a scorching export
pace, especially to top buyer China, analysts said.
    The USDA on Friday confirmed private sales of 115,000 tonnes
of U.S. soybeans to China for 2012/13 delivery. 
    Improved weather in South America, where farmers are
expected to harvest the biggest soy crop ever next year, added
pressure in soybeans.
    Rains are expected in Brazil's southern grain-producing
states, forecaster Somar said on Friday, a day after the
government held its forecast for a record soybean crop despite
some concern over dryness. 
    
 Prices at 2:24 p.m. CST (2024 GMT)      
                              LAST      NET    PCT     YTD
                                        CHG    CHG     CHG
 CBOT corn                  732.75   -15.00  -2.0%   13.3%
 CBOT soy                  1472.25   -19.00  -1.3%   22.8%
 CBOT meal                  450.50    -7.50  -1.6%   45.6%
 CBOT soyoil                 50.82    -0.05  -0.1%   -2.4%
 CBOT wheat                 844.25    -1.00  -0.1%   29.3%
 CBOT rice                 1526.50    -4.50  -0.3%    4.5%
 EU wheat                   268.50     0.75   0.3%   32.6%
 
 US crude                    85.94    -0.32  -0.4%  -13.0%
 Dow Jones                  13,126       51   0.4%    7.4%
 Gold                      1703.26     4.64   0.3%    8.9%
 Euro/dollar                1.2920  -0.0045  -0.4%   -0.2%
 Dollar Index              80.4340   0.1760   0.2%    0.3%
 Baltic Freight                966      -24  -2.4%  -44.4%
 
 (Additional reporting by Colin Packham in Sydney, Ivana
Sekularac in Amsterdam; Editing by John Wallace, Marguerita Choy
and Dale Hudson)
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