(NASDAQ) -Grain and soybean prices fell Friday as weather forecasts moderated, promising cooler and wetter conditions than previously expected, alleviating some worries over U.S. crops.
Corn and soybean prices declined for the second straight session, weighed down by weather models showing good rains in 10 to 15 days, while temperatures may not be as high as originally anticipated. While significant heat is widely expected to build across the Midwest next week, with temperatures topping 100 degrees in some areas, wet weather could lessen the impact somewhat by adding beneficial moisture to soils.
Still, analysts said agricultural markets likely would continue to seesaw in coming weeks as weather models shift, with traders and investors keeping a close eye on forecasts for clues to the likely size of corn and soybean crops. Soybean prices have been more volatile since domestic supplies of the oilseeds are smaller than corn or wheat, with oscillations in daily forecasts having a greater effect on that crop.
“The most recent forecast is still plenty hot and dry as we head into critical August weather,” said Doug Bergman, of RCM Asset Management, noting that until traders are confident that U.S. farmers will raise enough soybeans to meet demand, the market likely will not trend lower for long.
Soybean futures for delivery in August, the most actively traded contract, slid 11 1/4 cents, or 1%, to $10.72 1/2 a bushel at the Chicago Board of Trade.
Corn prices dropped in spite of forecasts for hot weather in the western Corn Belt, which likely will dent yields for that crop. Prices for the grain drifted lower because there is lingering uncertainty over which regions will see the worst heat, and how long it will last. As of Sunday, the U.S. corn crop also was in prime condition, meaning a week of high temperatures could have a “relatively minor impact on the crop,” said Charlie Sernatinger, head of grains trading at ED&F Man Capital Markets.
CBOT September corn declined 5 1/2 cents, or 1.5%, to $3.52 1/4 a bushel.
CBOT September wheat shed 9 1/4 cents, or 2.1%, to $4.24 3/4 a bushel.
