COMMODITIES : Corn, Soybean Prices Fall Again After Profit Taking
A clouded weekend weather outlook sent confidence and prices plummeting Friday in the corn and soybean pits of the Chicago Board of Trade.
On other markets, livestock and meat futures were mostly lower; energy futures were mixed; precious metals were mixed, and stock index futures retreated.
The grain market’s failure to rally on this week’s long-range drought forecasts for the Midwest prompted many traders to grab profits ahead of the weekend, analysts said.
The weekend forecasts were mostly bearish, with some private forecasters increasing the amount of rain they expected to fall in parts of the parched Farm Belt over the next two days.
Analysts said some traders also developed jitters ahead of Tuesday’s release of an Agriculture Department crop report that will provide tallies of this year’s planted acreage and revised crop production estimates.
Wheat Futures Higher
But the most discouraging factor was the market’s own performance during the week, said Rich Feltes, director of commodity research for Refco Inc., a large speculative trading firm based in Chicago.
“It’s not the news, but the market’s reaction to the news that’s most important,” Feltes said. “When the market fails to react to bullish news, it immediately injects nervousness, disappointment and fatigue into the market.”
Friday marked the second consecutive session of sharply lower corn, oat and soybean prices. Some corn contracts and most oat contracts fell their 15-cents-a-bushel limit for daily trading, and the contract for November delivery of soybeans plunged nearly the 45-cent limit for that market. Wheat futures were mostly higher.
“The market is perplexing,” said Victor Lespinasse, a trader in Chicago with Dean Witter Reynolds Inc. “It’s inexplicable why we’re down so hard when there isn’t that much rain around and the temperatures are very hot. Maybe the market knows something we don’t.”
After the close, the National Weather Service issued a 6- to 10-day outlook, extending its forecast for above-normal temperatures and below-normal rainfall in the Midwest through July 18.
Wheat settled 4.50 cents lower to 9 cents higher, with the contract for delivery in July at $3.86 a bushel; corn was 2 cents to 15 cents lower, with July at $3.095 a bushel; oats were 8 cents to 15 cents lower, with July at $2.93 a bushel; soybeans were 5 cents lower to 40 cents lower, with July at $9.24 a bushel.
Cattle futures finished mixed on the Chicago Mercantile Exchange. Analysts said cattle traders reacted to the drop in grain prices by reversing their recent trend of selling contracts for summer and fall delivery while bidding up the 1989 contracts.
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