July 26 (Bloomberg) -- Soybeans fell in Chicago for a third day this week on speculation rains in parts of the Midwest may aid crops hurt by the worst drought in at least a generation. Wheat dropped.
Storms continuing today will bring “moderate rainfall” to areas of Indiana and Ohio, while Iowa and Illinois may see lighter moisture, AccuWeather Inc. said in a report. The U.S. Department of Agriculture has declared 44 percent of U.S. counties as disaster areas because of drought, and the agency cut its forecasts for domestic corn and soybean production July 11. The USDA will update its crop outlook Aug. 10.
The “improved weather forecast has been a contributing factor to the weakness in grain prices over the past few days,” Luke Mathews, a commodity strategist at Commonwealth Bank of Australia, said by phone from Sydney. “We don’t believe the rain is a game-changer. We still expect significant cuts in corn yield prospects compared to the USDA’s July estimate.”
Soybeans for November delivery declined 0.1 percent to $16.145 a bushel on the Chicago Board of Trade by 1:20 p.m. in London. The oilseed, which reached a record high of $16.915 on July 23, is down 4.3 percent this week.
Corn for December delivery rose 0.6 percent to $7.9275 a bushel. The most-active contract touched a record $8 on July 23.
Rains may do more to aid soybeans than corn as the grain matures earlier in the U.S., said Carsten Fritsch, an analyst at Commerzbank AG in Frankfurt. As of July 22, 86 percent of the U.S. corn crop was in the silking stage, while only 36 percent of soybeans were setting pods, USDA data show. Those phases are critical in determining yields for both crops.
“The forecast of more rainfall in the U.S. Midwest is the reason why grain prices dropped quite significantly,” Fritsch said by telephone yesterday. “In corn, rainfall probably was too late to improve prospects there.”
Wheat for September delivery fell 0.4 percent to $8.9975 a bushel. Futures have jumped 44 percent since June 15. In Paris, November-delivery milling wheat slid 0.8 percent to 258.50 euros ($316.97) a metric ton on NYSE Liffe after climbing 3.8 percent yesterday.
Jordan extended the deadline for bids in a tender to buy 100,000 tons of wheat to July 31 from July 25, according to three traders with direct knowledge of the situation. Higher prices may spur “demand rationing” from importers, Mathews said in a report.
Concern that Russia will restrict grain exports has supported prices, Jaime Nolan-Mirales, a commodity risk manager with INTL FCStone Inc. in Dublin, said in an e-mailed report. Russia’s wheat yields have declined 31 percent because of drought, Interfax reported July 24, citing Agriculture Ministry data. Paris wheat futures almost doubled in 2010 after drought spurred Russia to bar grain exports.
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