Corn hits 7-year low

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US corn futures plunged to a seven-year low on Friday and hit contract lows in all months after a the government forecast a larger-than-expected harvest, but the market ultimately closed firm as the low prices prompted bargain buying.

Wheat recovered from early lows and closed slightly higher on short covering. "I think that stabbing down into new lows opened the door for a lot of users to do some pricing," said Roy Huckabay, analyst with the Linn Group. 

"The guys have been really slow to cover September. On this break, they have not only reached out and covered their short basis, they have covered their short futures too," he said.

Chicago Board of Trade September corn futures closed 1-1/4 cents higher at $3.22-1/4 a bushel after sinking as low as $3.12, the lowest point for a spot contract since September 2009. Actively traded December corn gained 1-1/4 cents to $3.33, ending the week down 0.4 percent, the contract´s seventh weekly decline in eight weeks.  CBOT September wheat closed up 6-1/4 cents, or 1.5 percent, at $4.22-1/2 a bushel.