Soybeans fell to the lowest since January 2012, as rain in the Midwest and more forecast for August boosted U.S. yield potential. Wheat and corn futures rose on speculation that demand will improve after prices slid.
Some fields from Kansas to Illinois received as much as 2 inches (5.1 centimeters) of rain in the past 24 hours, boosting soybean crops after the area received as little as 25 percent of normal precipitation since June 30, government data show. Rain may relieve stress in dry fields from Nebraska to Wisconsin beginning Aug. 1, World Weather Inc. said in a report today.
“Concerns about dry soils are easing,” Ben Buckner, a market analyst for AgResource Co. in Chicago, said in a telephone interview. “The overall weather can’t get any better for soybean yield potential.”
Soybean futures for delivery in November dropped 1.4 percent to close at $12.03 a bushel at 1:15 p.m. on the Chicago Board of Trade, after touching $12, the lowest for a most-active contract since Jan. 31, 2012.
Soybeans have fallen 15 percent this year compared with a 32 percent drop in corn as the U.S. Department of Agriculture forecast domestic production of both crops would rise to records after drought damaged reduced harvests last year.
March soybean futures rose to a premium of 2.56 times more than March corn futures on July 24, the highest for the March continuation contract since June 2010, exchange data compiled by Bloomberg show.
“A lot of today’s selling in soybeans was profit taking on the spread,” Buckner said. “There was too much weather premium in soybeans relative to corn.”
Wheat futures rose on speculation that U.S. grain supplies are becoming more competitive with other exporting nations, Buckner said.
Japan, the largest buyer of U.S. wheat, agreed to resume purchasing the western-white variety, lifting a two-month ban imposed after the discovery of an unapproved gene-altered crop in Oregon. Egypt, the world’s biggest wheat importer, is tendering for the grain today, its fourth state purchase this month. China also has stepped up acquisitions of U.S. supplies as prices in Chicago slumped to a 13-month low.
“There is a little bit of a bullish case you can make for wheat, in terms of extra demand coming on,” Dave Norris, an independent grain broker in Harrogate, England, said in a telephone interview today. “Japan, Egypt and China are a bit supportive.”
Wheat futures for delivery in September advanced 0.6 percent to $6.5525 a bushel on the CBOT, the biggest gain since July 19.
Corn futures for delivery in December increased 0.9 percent to $4.775 a bushel in Chicago, halting a six-session, 5.5 percent slide.