Prices of soybean futures tumbled to their lowest levels in more than five weeks Monday as weekend rains in the parched Midwest prompted a third straight day of plummeting grain prices on the Chicago Board of Trade.
Trading on other commodities exchanges also featured extreme price movements. Cattle futures soared while most pork futures were sharply lower; sugar took a hard hit; platinum plunged its daily limit, leading other precious metals down, and stock index futures advanced.
In Chicago, prices on most corn, oat and soybean contracts fell their daily limits within minutes of the opening bell. But the contracts for July delivery, on which the limits have been removed pending their July 20 expiration, continued to trade--generally lower.
July soybeans dropped 66 cents a bushel to $8.58, the lowest settlement price for that contract since June 3. Corn for July delivery dropped 21.25 cents to $2.88 a bushel, the lowest level since June 15.
Weekend showers brought fairly widespread relief to Midwestern croplands, easing fears of drastic yield reductions and spurring profit taking in the trading pits, analysts said. Forecasts for more rain in the Corn Belt later this week forced further reductions in the market's estimate of prospective grain values.
Oat futures prices reached a record $3.94 a bushel on June 28. Corn for near-month delivery hit $3.59 a bushel on July 5.
Depends on Weather
But experts say soybeans, which have fallen about 22% since reaching a 15-year high of $10.995 on June 23, still could rally beyond that point.
"Soybeans generally go through the major pod-setting stage from the end of July through August," said Cathy Leow, an analyst with Thomson McKinnon Securities Inc. in New York. "We did not get enough rain to bring the crop back, and basically we're still in a weather market."
"It all depends on the weather," agreed Victor Lespinasse, a trader with Dean Witter Reynolds Inc. "Unless the weather goes back to its previous very hot and dry pattern over a wide area, we're not going to go back up.
"But if the weather goes back to hot and dry, and that persists for a week or 10 days, we will go back up again," he said. "One rain does not make a crop."
In a 6- to 10-day outlook issued after the close, the National Weather Service predicted temperatures and rainfall closer to normal in the Midwest for the first half of next week.
Cautious trading was expected today before an Agriculture Department report on planted-acreage totals and revised supply-demand projections.
Wheat settled 16.75 cents to 19.75 cents lower, with July at $3.68 a bushel; corn was 13 cents to 21.25 cents lower, with July at $2.8825 a bushel; oats were 15 cents to 27 cents lower, with July at $2.66 a bushel, and soybeans were 44 cents to 66 cents lower, with July at $8.58 a bushel.
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