NEW YORK: Fear of high corn stockpiles and uncertainties in the outlook for sugar and cotton sparked a massive sell-off in agricultural markets on Friday, Oct 1 overshadowing the rally in energy and metals.
U.S. corn futures tumbled the 30-cent trading limit in near record volume to end down 6 percent for the session and 10 percent for the week in an extended reaction to Thursday's government crop report showing hefty inventories of the grain.
Soybeans fell 4 percent on the day and wheat over 3 percent.
Raw sugar closed down half a percent, adding to the previous session's drop of almost 6 percent. Analysts said investors were worried the sweetener's near 50 percent gain during the third quarter had outpaced demand.
The liquidation marked a sharp reversal in trend for agricultural markets, which were among the biggest gainers in commodities during the just-ended quarter.
"I'm sure that the market had outstripped its fundamentals," Keith Brown, a cotton broker in Moultrie, Georgia, said after U.S. cotton futures plunged about 4 percent from 15-year highs. "(Speculators) carried us up ... now, they are feeding upon themselves like piranha trying to get out faster than the next guy."
The 19-commodity Reuters-Jefferies CRB index settled down almost half percent after rising as much earlier in the session, following a 2 percent rally in oil and copper and a new record high in gold. The CRB rose nearly 11 percent in the third quarter, its biggest gain in five quarters, with sugar being the index's star performer.
The about-face in agriculture after the strong third quarter made some grains traders wonder if they were looking at the start of a prolonged lean period for prices. But some, like those in the sugar trade, expected a quick rebound.
"With oil so strong and the dollar weakening further, it would seem sugar will hold rather than continue the collapse, and we would expect the support to hold," said Thomas Kujawa of Sucden Financial Sugar, who predicted the sweetener would hold at above 22.50 cents a lb. New York's key raw sugar contract closed at 23.36 cents per lb.
Corn posted its biggest one-day drop since Jan. 12, when the government released another bearish report on stockpiles of the grain. Chicago's key corn contract for December finished at $4.65-3/4 a bushel, falling the 30 cent that also contributed to its biggest weekly loss since mid-January.
Crude oil's benchmark front-month contract in New York rose almost 2 percent to settle above $81 a barrel, a level not seen since Aug. 10, as a sliding dollar caused investors to hedge in oil and metals.
Gold hit record highs for a sixth successive session, scaling above $1,320 per ounce.
Copper rose 2 percent to scale two-year highs in both London and New York after China's latest manufacturing data showed an important engine of global growth was humming again after sputtering in the second quarter.
Analysts said trading in the week ahead was likely to be influenced by U.S. factory orders and pending home sales data for August, due on Monday, and jobs data for September, scheduled for Friday. - Reuters
U.S. corn futures tumbled the 30-cent trading limit in near record volume to end down 6 percent for the session and 10 percent for the week in an extended reaction to Thursday's government crop report showing hefty inventories of the grain.
Soybeans fell 4 percent on the day and wheat over 3 percent.
Raw sugar closed down half a percent, adding to the previous session's drop of almost 6 percent. Analysts said investors were worried the sweetener's near 50 percent gain during the third quarter had outpaced demand.
The liquidation marked a sharp reversal in trend for agricultural markets, which were among the biggest gainers in commodities during the just-ended quarter.
"I'm sure that the market had outstripped its fundamentals," Keith Brown, a cotton broker in Moultrie, Georgia, said after U.S. cotton futures plunged about 4 percent from 15-year highs. "(Speculators) carried us up ... now, they are feeding upon themselves like piranha trying to get out faster than the next guy."
The 19-commodity Reuters-Jefferies CRB index settled down almost half percent after rising as much earlier in the session, following a 2 percent rally in oil and copper and a new record high in gold. The CRB rose nearly 11 percent in the third quarter, its biggest gain in five quarters, with sugar being the index's star performer.
The about-face in agriculture after the strong third quarter made some grains traders wonder if they were looking at the start of a prolonged lean period for prices. But some, like those in the sugar trade, expected a quick rebound.
"With oil so strong and the dollar weakening further, it would seem sugar will hold rather than continue the collapse, and we would expect the support to hold," said Thomas Kujawa of Sucden Financial Sugar, who predicted the sweetener would hold at above 22.50 cents a lb. New York's key raw sugar contract closed at 23.36 cents per lb.
Corn posted its biggest one-day drop since Jan. 12, when the government released another bearish report on stockpiles of the grain. Chicago's key corn contract for December finished at $4.65-3/4 a bushel, falling the 30 cent that also contributed to its biggest weekly loss since mid-January.
Crude oil's benchmark front-month contract in New York rose almost 2 percent to settle above $81 a barrel, a level not seen since Aug. 10, as a sliding dollar caused investors to hedge in oil and metals.
Gold hit record highs for a sixth successive session, scaling above $1,320 per ounce.
Copper rose 2 percent to scale two-year highs in both London and New York after China's latest manufacturing data showed an important engine of global growth was humming again after sputtering in the second quarter.
Analysts said trading in the week ahead was likely to be influenced by U.S. factory orders and pending home sales data for August, due on Monday, and jobs data for September, scheduled for Friday. - Reuters
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