BLBG: Corn, Soybean Prices Drop Most in Three Weeks on Beneficial U.S. Weather
Corn and soybean futures slumped the most in three weeks on speculation that rain and cooler weather will bolster crop development in the U.S., the world’s biggest producer.
Some northern Midwest fields and parts of the South got as much as 4 inches (10 centimeters) of rain in the past three days, Commodity Weather Group LLC said in a report. Commodity prices eased after Congress and President Barack Obama failed to reach a deal to raise the U.S. debt ceiling.
“Cooler and wetter weather in the central U.S. brought temporary relief to heat-stressed crops,” Greg Grow, the director of agribusiness at Archer Financial Services Inc. in Chicago, said in a telephone interview. “The saga of U.S. debt- ceiling talks encourages traders to reduce risk exposure.”
Corn futures for December delivery fell 11 cents, or 1.6 percent, to $6.745 a bushel at 1:15 p.m. on the Chicago Board of Trade, the biggest drop since July 1. The price has jumped 75 percent in the past 12 months.
Soybean futures for November delivery dropped 16.25 cents, or 1.2 percent, to $13.72 a bushel, the biggest decline since June 30. The oilseed has gained 40 percent in the past year.
Hot, dry weather will return by July 28 and continue the following week, increasing stress on a third of the Midwest crops, Bethesda, Maryland-based Commodity Weather Group said.
In the week ended July 17, an estimated 66 percent of the U.S. corn crop was in good or excellent condition, down from 69 percent a week earlier, the government said last week. About 64 percent of soybeans got the top rankings, down from 66 percent.
“I expect both corn and soybean crop conditions to fall 2 percentage points” in the report scheduled for release after the close of trading, Grow said. “August rains will be critical for final yields.”
Corn is the biggest U.S. crop, valued at $66.7 billion in 2010, followed by soybeans at $38.9 billion, government figures show.
To contact the reporter on this story: Jeff Wilson in Chicago at jwilson29@bloomberg.net
To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net.
