U.S. corn futures settled lower Wednesday in a setback from record highs Tuesday, as traders booked profits and unwound intermarket spreads in which they had bought corn and sold soybeans, which ended slightly higher Wednesday.
Corn for May delivery, the most actively traded contract, ended down 3 3/4 cents, or 0.5%, to $7.63 a bushel at the Chicago Board of Trade.
The corn market was a little overbought following a jump of nearly 16% in prices over the past four trading sessions.
"After the big run up in prices to historic highs, the market has struggled, a potential signal that futures may have reached a legitimate level that will curb usage of tight projected corn supplies for the time being," said John Kleist of e-bottrading.com.
Profit-taking was the theme of the session, with analyst saying that, aside from two new crop sales of corn to unknown destinations this week, there hasn't been any other fresh news to extend prior advances.
Otherwise, traders took the opportunity to reduce some risk exposure ahead of the U.S. Department of Agriculture's updated supply/demand estimates Friday.
Industry analysts widely expect federal forecasters to cut their outlook for season-end corn inventories, but trade estimates are indicating adequate carryout projections to satisfy usage, said Karl Setzer, analyst with MaxYield Cooperative.
Soybean futures saw moderate gains, as traders booked profits on recent short positions after stumbling lower in the three previous trading days.
The soy market was oversold after three days of selling pressure, particularly in the face of tight projected end-of-year supplies, Kleist said. But he noted the advances were limited as slowing seasonal demand and a general sense of comfort in the market that South American production will relieve the strain on tight U.S. stocks kept a lid on advances.
Wheat futures fell Wednesday, succumbing to selling attributed to spillover pressure from corn futures. Corn and wheat are both linked, as they compete with each other in the feed market.
Wheat also drew pressure from a lack of visible export demand, a feature that offset the potential for crop troubles in the plains, particularly after recent gains adequately factored in those threats, Kleist said.
Soybeans for May delivery ended up 3 1/4 cents, or 0.2%, at $13.76 1/2 a bushel at CBOT. Soft red winter wheat for May delivery dropped 4 cents, or 0.5%, to $7.82 1/4 a bushel.
Soy-product futures ended mixed, with soymeal rebounding from recent declines with soybeans. CBOT May soymeal ended 0.6% higher at $355.60/short ton while May soyoil edge down 0.07 cent at 58.78 cents a pound.
Ethanol futures finished lower with corn. Ethanol for May delivery slipped 1.9 cent, or 0.7%, to $2.70 per gallon.
Oat futures finished near unchanged, with the May contract edging up 1/2 cent, or 0.1%, to $3.92 a bushel. U.S. rice futures weakened on spillover pressure from losses in the neighboring wheat and corn markets. CBOT May rice closed down 3 cents at $14.08 per hundredweight.
Hard red winter wheat for May delivery lost 10 1/2 cents, or 1.1%, to $9.39 1/2 a bushel at the Kansas City Board of Trade. Hard red spring wheat for May delivery fell 7 3/4 cents, or 0.8%, to $9.54 1/2 at the Minneapolis Grain Exchange.