U.S. corn futures dipped slightly Friday after China's central bank said it will increase bank reserve requirements, stoking concern about commodity demand and sending soybeans sharply lower.

Corn for March delivery at the Chicago Board of Trade corn closed down 3 cents to $7.09 3/4 per bushel. The market gained 3 1/4 cents on the week.

Losses were limited despite a 40-cent drop in soybeans, as fresh corn export sales to Mexico were a fresh reminder that high prices have yet to choke off demand, particularly for exports.

But news overnight that China raised its bank lending reserve ratio for the second time this year in an attempt to fight inflation weighed on commodities generally.

Such efforts are seen as negative for commodity demand, as China is a key global consumer.

Still, corn prices are at rare heights, and closed above $7 for the second day in a row. Prices haven't been this high since July 2008. Prices jumped 3.2% on Thursday.

"At $7, it's not unexpected to see some choppy trade here until we get a little more perspective on how demand is shaping up," said Marty Foreman, analyst with Doane Advisory Services.

So far, Foreman, said, demand "seems to be holding up pretty well" despite the high prices. With the government projecting U.S. supplies to hit their lowest level in 15 years, prices must climb to a point that scares off buyers, analysts said.

While ethanol production has dipped the past three weeks, exports have been strong, with sales of more than 1 million metric tons for three straight weeks.

On Friday, the USDA reported 156,100 metric tons were sold to Mexico. Demand from Mexico is increasing because of a recent freeze that destroyed a portion of the crop there.

The market will be closed Monday for the Presidents Day holiday.

Traders say prices must remain strong in order to compel farmers to plant more acres and replenish dwindling supplies.

Longer-term, U.S. corn acreage, expected to top 90 million acres this year for only the second time since World War II, will likely remain above that threshold through at least 2013, fertilizer producer CF Industries Holdings Inc. (CF) said Friday.

CF Industries is forecasting farmers will plant 92 million acres of corn this year, up from 88.2 million a year ago. Chief Executive Stephen Wilson said Friday he expects acreage to remain above 90 million in both 2012 and 2013.

U.S. corn acreage shifted dramatically in 2007, to 93.5 million from 78.3 million. Prior to that, acreage hadn't exceeded 90 million since 1944, according to the USDA.

Ethanol futures slipped slightly in a setback from 31-month highs reached Thursday. Ethanol for March delivery lost 0.1 cent, or 0.04%, $2.504 a gallon, while ethanol for May delivery fell 0.8 cent, or 0.3%, to $2.523.

Oat futures weakened on profit-taking ahead of the holiday weekend. Oats for March delivery dropped 5 1/4 cents, or 1.3%, to $4.09 3/4 a bushel.