Soybeans Post Biggest Intraday Loss Since July on Rain Forecasts
Soybeans had the biggest intraday loss since July, paring a monthly advance, as predictions for some rain in the U.S. Midwest eased concern that yields may be curbed by hot, dry weather.
The contract for delivery in November lost as much as 1.6 percent to $13.46 a bushel on the Chicago Board of Trade, matching the drop for most active futures on July 30. Soybeans traded at $13.51 at 2:44 p.m. in Singapore for a 12 percent increase this month, the most since July 2012.
Rains across central and eastern areas of the Midwest this weekend will improve moisture slightly for soybean and corn growth, mainly in Ohio, Indiana and eastern Illinois, MDA Information Systems LLC said in a five-day forecast yesterday. Showers in northwest Illinois, Iowa and South Dakota may be too light to result in significant improvement, according to the report. The U.S. is the largest grower of both crops.
“Forecasts of impending rain are helping the outlook for soybean yields at the moment, but how beneficial the rains would be is still open to question,” said Joyce Liu, an investment analyst at Phillip Futures Pte in Singapore. “Investors are still haunted by lingering memories of last year’s drought.”
The drought threat for U.S. crops is not over, analysts Bennett Meier and Alan Lee of Morgan Stanley said in a report dated today in which they cut corn and soybean yield forecasts to 155.5 bushels per acre and 42.1 bushels per acre. They favor corn over soybeans as the grain also faces frost risks.
Drought conditions expanded in Iowa and Illinois, damaging crops in the biggest corn and soybean-growing states, the U.S. Drought Monitor said yesterday.
Corn for December delivery fell as much as 1 percent to $4.765 a bushel and traded at $4.77. Wheat for December fell 0.2 percent to $6.5275 a bushel. The contract headed for a 1.7 percent decline this month.
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