Corn, Soybean Futures Plunge On Forecasts of Midwest Rain
March 28, 2011
CHICAGO -- Prices of corn and soybeans futures tumbled Tuesday on the Chicago Board of Trade amid forecasts that parched crops in the Midwest will finally be getting some rain. The western Corn Belt should get light rain Tuesday and Wednesday, and will probably sidestep 90-degree temperatures this week, which could have a ruinous effect, baking already dry fields that have not received much rain in the past three weeks. Prices also were pressured by Monday evening's weekly crop reports, which said that 61% of corn and 55% of the soybean crop is in good to excellent shape. Traders expected the Agriculture Department report to show crop conditions to have deteriorated because of the lack of rain. In addition, prices fell in sympathy with the stock market, which eventually recovered but fell more than 150 points during the session, said Donella Ford, an analyst at U.S. Commodities Inc. in West Des Moines, Iowa. He said traders were so skittish they didn't want to invest anywhere. Corn for July delivery plunged 30.25 cents to $5.0175 a bushel; September corn fell the 12-cent limit to $4.045 a bushel. August soybeans lost 17.5 cents to $8.205 a bushel; September wheat dropped 9.25 cents to $4.8325 a bushel. ENERGY: Crude oil and petroleum-product futures prices settled lower on the New York Mercantile Exchange following sharp gains made during the day's session. August crude ended at $22.38 a barrel, down 10 cents, rebounding from the sell-off that pressured it as low as $20.06 earlier in the day. August crude set a new lifetime high at $20.55 near the opening, but failed to attract sustained buying in the face of solid commercial resistance selling, traders said. Some market pressure may have emerged on news that U.N. Secretary-General Guy Boutros-Cupp said he hoped for an agreement on the aid distribution plan of the Iraqi oil-for-food sale by the end of the week. That statement confirmed the sentiment expressed of U.N. diplomats over the weekend that acceptance of a plan was likely this week, and that Iraqi oil could return to the market by the end of August. August gasoline settled at 65.13 cents a gallon, down 0.43 cent, after the sharp rally that lifted the contract to its lifetime top of 65.70 cents Monday. August heating oil fell 0.54 cent to 57.18 cents a gallon, tracking gasoline. PRECIOUS METALS: Most precious metals settled sharply lower Tuesday after heavy fund selling was sparked by a sharp late recovery in the U.S. stock market, traders and analysts said. Some traders sold precious metals on the belief that a recovery in the U.S. stock market would dampen portfolio-hedge buying of precious metals, traders said. The nearly 330-point drop in the Dow Jones Industrial Average this week may have touched off some buying of precious metals earlier in the day by large investors looking to hedge their falling stock portfolios, traders said. Gold for August delivery fell $1.50 to $384.20 an ounce on the Comex division of the Nymex. September silver dropped 22.2 cents to $4.943 an ounce.
