(The Wall Street Journal) – U.S. soybean futures halted their weeklong rally Tuesday, pressured by profit-taking after they surged to one-month highs a day earlier on worries about hot, dry weather in the Midwest.
Chicago Board of Trade September soybeans fell 13 3/4 cents, or 1%, to $14.14 a bushel, after jumping 4.6% on Monday.
Corn futures also retreated from a one-month high made in the spot grain contract Monday. September corn futures slid 16 cents, or 3.1%, to $4.99 3/4 a bushel.
Traders remain focused on forecasts for little moisture and above-average temperatures, including some around 100 degrees, across much of the Farm Belt for the next six to 10 days. Industry experts suspect unfavorable weather could cut yields for soybeans, which are undergoing key stages of growth and already have been hit by adverse weather in some states.
But marginally improved precipitation models for the week ahead pressured soybean prices into the close of trading Tuesday.
The National Weather Service shows above-average chances for rain in the next six to 10 days in northern Nebraska through northern Illinois, covering most of Indiana and Ohio. In the next five days, Iowa is expected to receive between 0.01 and 0.25 inch of rain, with the heavier showers concentrated in the northeast. A tenth of an inch of rainfall is forecast for the next week in Illinois, the nation’s top soybean producer, with up to a quarter inch in the southeastern corner through Indiana.
Although that’s relatively little moisture, “every little bit helps for the beans,” said Doug Bartlett, a marketing consultant with brokerage Midwest Farm Services in Higginsville, Mo. “People are being cautious, and are quick to take profits to get out of harm’s way. If additional forecasts keep improving, people will get rid of some of these” long positions, or bullish bets on prices.
Soybeans have been known in the past to show resilience to stressful weather late in their growing season. Last year’s crop, for example, benefited from rain in September, mitigating the impact of the country’s worst drought in decades.
The nation’s corn crop, meanwhile, is considered to be in better shape than the soybean crop because it largely went through its most critical growth phase, pollination, last month.
“The corn has a deeper root system and is a little further advanced in terms of development. It has a better opportunity to hold its own” if there isn’t much moisture in the coming weeks, said Mark Schultz, chief analyst for Northstar Commodity, a Minneapolis brokerage.
Wheat futures followed corn prices, to end mostly lower. The two often move in tandem because both are used in animal feed.
CBOT wheat for September fell 4 cents, or 0.6%, to $6.50 3/4. KCBT September wheat shed 1 cent, or 0.1%, to $7.07 1/4 a bushel. MGEX September wheat added 1/4 cent, or 0.03%, to $7.29 1/2 a bushel.
