Aug. 30 (Bloomberg) -- Soybeans fell for a second day in Chicago, paring a monthly gain, as predictions for rain in the U.S. Midwest eased concern that heat and dryness will hurt yields. Corn rose, while wheat declined.
Indiana and Ohio may see an inch (2.5 centimeters) of precipitation through Sept. 2, while moisture will be less further west, National Weather Service data show. Much of the central and northern Midwest, including areas of top producers Iowa and Illinois, had less than half of the normal amount of rain in the past 60 days. Corn and soybean futures rallied to record highs last year amid the worst drought since the 1930s.
“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.”
Soybean futures for delivery in November slid 0.8 percent to close at $13.575 a bushel at 1:15 p.m. on the Chicago Board of Trade. The oilseed gained 13 percent this month, the most since July 2012, on concern crops that were delayed by wet weather earlier this year will be damaged by dry weather now or an early frost in the next few weeks. Trading on the CBOT will be shut Sept. 2 for the U.S. Labor Day holiday.
Corn futures for delivery in December added 0.1 percent to $4.82 a bushel in Chicago, boosting prices 2.6 percent this week. The most-active contract rose 0.6 percent this month, the first gain since January.
Drought expanded in Iowa and Illinois in the most recent week, the U.S. Drought Monitor said yesterday. Iowa, Illinois and Indiana are headed for the driest August since 1897, according to T-Storm Weather. Morgan Stanley, Planalytics Inc. and Macquarie Bank cut forecasts for corn and soybean yields today.
Parts of the eastern Midwest may get as much as 0.85 inch of rain in the next two days while some fields in the western region of the main corn and soybean-growing area may get as much as 0.5 inch on Sept. 1, World Weather Inc. said in a report today. The western Midwest may receive as much as 1.5 inches of rain beginning Sept. 9, which may be too late for some crops hurt by hot, dry weather this week, the forecaster said.
“It’s going to be cooler and wetter than it has been, and that has triggered the selling,” Jim Gerlach, president of A/C Trading Co. in Fowler, Indiana. “People are going to be surprised by the damage that has already occurred.”
Wheat futures for delivery in December slipped less than 0.1 percent to $6.54 a bushel, capping a 1.5 percent decline this month.
The International Grain Council raised its forecast of world wheat production today to 691 million metric tons, up 0.6 percent from an estimate a month ago.
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