Commodities for Friday, July 5, 1985 : Soybeans Lead Grain Rally

The forecast for hot and dry weather next week prompted a sharp rally in soybean futures prices Friday on the Chicago Board of Trade.

Corn prices also rallied in response to the forecast, though prices advanced less than soybeans. Wheat prices also were higher, primarily in response to the rallies in the corn and soybean pits, analysts said.

A change in next week’s weather forecast was the major factor encouraging buyers, said Victor Lespinasse, a grain analyst in Chicago with Dean Witter Reynolds. The National Weather service predicted hot and dry conditions next week, which was a change from the forecast for normal rain and cool temperatures.

Lespinasse said speculators, particularly large professionals, were big buyers in the corn and soybean pits. Companies that process and export grains were buyers, he said.

Many traders who had sold contracts in previous sessions were buying them back Friday, analysts said, as prices could continue to advance if the forecast is accurate.

“The weather calls the tune,” said Lespinasse. “If it’s not hot and dry, we’ll go lower; if it is hot and dry, we’ll keep going higher.”