Commodities : Grain, Soybeans Retreat

Grain and soybean futures prices retreated sharply Wednesday on forecasts that parts of the Midwest would get some relief this week from hot, dry weather.

But a late rally trimmed corn and soybean losses as doubt about the forecasts unnerved traders at the Chicago Board of Trade.

Soybeans lost as much as 20 cents a bushel before the late rally, in which traders were buying aggressively to offset earlier sales.

“Prices broke way down on forecasts showing more rain in the Midwest, but then we got all sorts of conflicting weather forecasts,” said Victor Lespinasse, a trader with Dean Witter Reynolds Inc. Late in the day some private forecasters were taking rain out of their projections for later in the week, he said. “That’s what got traders nervous.”

Meanwhile, the National Weather Service was sending out severe thunderstorm alerts for a broad stretch of the Mississippi River Valley, although hot, dry conditions prevailed to the east and west of the storm zone. After the close of trading the Weather Service issued its six- to 10-day outlook, which predicted warmer-than-normal temperatures but more rain than usual over the Corn Belt.