Better Weather Sends Grain, Soybean Futures Prices to New Lows

June 22nd, 2016

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Category: Grains, Oilseeds

Weather-Sky450x299(Nasdaq) – Prices of U.S. grain and soybean futures tumbled to multi-week lows on Tuesday, dropping as rainfall doused parts of the Midwest and alleviated some worries that adverse weather would curtail harvests in the fall.

Corn prices plunged nearly 6% to a one-month low as rains spread east across the Farm Belt from Iowa, bringing beneficial moisture to big grain-producing states. Moderating temperatures also weighed on the corn market, as cooler weather during corn’s upcoming pollination phase is seen as friendly to crop yields.

“It’s all weather all the time right now,” said Jim Gerlach, president of A/C Trading Co., a Fowler, Ind. brokerage firm. He warned that while many people are betting more beneficial rains will wash over fields in the Midwest this week, “this time of year you need actual rain not forecasted rain” to justify lower prices.

Corn futures for July slid 25 cents, the exchange-imposed daily trade limit, or 5.9%, to $3.96 1/4 a bushel at the Chicago Board of Trade. That’s the lowest settlement price for a front-month contract since May 20.

Wheat prices dropped to a six-week low, pressured by sliding corn prices and harvest progress in the U.S. southern Plains, where farmers are reporting bigger-than-expected yields of the grain. “It’s kind of hard to like wheat right now,” said Mr. Gerlach. CBOT July wheat declined 14 1/2 cents, or 3.1%, to $4.58 1/2 a bushel, the lowest closing price since May 12.

Meanwhile, soybean prices declined to the lowest level in more than two weeks, weighed down by improving weather forecasts. Still, losses in the oilseed market were limited by ongoing evidence of demand for the crop. The U.S. Department of Agriculture on Tuesday said private exporters had booked sales totaling 258,000 metric tons of soybeans for delivery to China and unknown destinations during the 2015-16 and 2016-17 crop years. Exporters also sold 40,000 metric tons of soybean oil to China.

CBOT July soybeans fell 10 1/4 cents, or 0.9%, to $11.33 1/4 a bushel, the lowest settlement price since Jun. 3.

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