Soybeans Drop as Rains Forecast for Midwest Seen Easing Dryness

08:29AM Aug 05, 2014
Michigan soybean field
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Soybeans fell in Chicago, trading near the lowest since 2010, on speculation that rain forecast for the U.S. will ease recent dry weather that threatened to cut yields in the world’s top grower. Corn also declined.

Rain in the next few days will be heaviest in the western Midwest and temperatures probably will be below normal in much of the Corn Belt, QT Weather said in a report. U.S. soybean and corn production may top records at 3.865 billion bushels and 14.455 billion bushels, respectively, bigger than the U.S. Department of Agriculture estimates, INTL FCStone Inc. said yesterday. The USDA is set to update its crop forecasts Aug. 12.

"Expectations are for some very big harvests," Tom Pugh, a commodities economist at Capital Economics in London, said by telephone today. "There’s no real reason why prices can’t trend still a little lower."

Soybeans for November delivery retreated 1.5 percent to $10.63 a bushel by 7:05 a.m. on the Chicago Board of Trade. Futures touched $10.54 yesterday, the lowest since October 2010, before rebounding to settle 2 percent higher amid signs of increasing demand for U.S. exports and concern about dry weather in some areas. Prices have slumped 18 percent this year.

Corn for delivery in December fell 1.1 percent to $3.6525 a bushel, after climbing 1.9 percent yesterday. The grain has dropped 13 percent this year.

Seventy-one percent of soybeans in the main U.S. growing areas were in good or excellent condition as of Aug. 3, unchanged from the previous week and the highest for the date since 1994, USDA data show. About 73 percent of corn crops were rated good or excellent, down from 75 percent a week earlier, according to USDA’s report released yesterday.

Wheat for September delivery fell 0.6 percent to $5.4075 a bushel in Chicago. The grain climbed 4.5 percent in the prior four sessions amid speculation that demand will increase for U.S. supplies as excess rain in France and Germany eroded the quality of crops from Europe’s top two producing countries.

In Paris, milling wheat for November delivery dropped 0.1 percent to 173 euros ($231.56) a metric ton on Euronext.