Chicago grains slumped on Thursday amid aggressive selling, as weather forecast indicated active rain events for next week in Argentina, which eased concerns over crop health. Besides, a stronger U.S. dollar and talks of overbought condition added to the negative tone.
The most active corn contract for March delivery closed at 6.435 U.S. dollars per bushel, down 15 U. S. cents, or 2.3 percent, from the prior trading day. March wheat declined 20.75 U. S. cent, or 3.2 percent, to 6.2925 dollars per bushel. March soybean lost 21 cents, or 1.7 percent, to 12.09 dollars per bushel.
Market analysts said that fund traders were aggressive sellers on the market as weather forecast showed near 100-percent coverage of measurable rain in Argentina next week, and they feared that the forecast could turn even more bearish over the weekend.
Meanwhile, a sharply higher dollar also helped weigh on the sentiment. The dollar index, which measures the value of dollar against six other currencies, on Thursday traded around 80.9, up almost one percent from the prior trading day.
Besides, talks of the overbought condition after the recent surge also helped to pressure the grain market on the whole.
The dry and warm weather in Argentina and Brazil was expected to hurt crop growth and grain production in the future, bringing strong rally on the grain market. Officials from the key producing state of Parana in Brazil predicted that the corn crop this year would reach 6.4 million metric tons, which is down from 7.4 million in 2011 December due to dry weather, and soybean, 12.73 million metric tons, as compared with 14.12 million in December 2011.