Corn, Soybean Futures Decline After Rain Drenches Midwest
May 01, 2011
Corn and soybean futures prices retreated Monday on the Chicago Board of Trade after rain swept much of the Midwest over the weekend and alleviated drought fears. Wheat futures rose amid indications the recent slump in export sales is over. If futures traders are right about the future, the value of a barrel of crude oil in the U.S. won't dip below $20 for at least seven months. An unexpected soaking Sunday night in central Illinois brought relief to corn and soybean crops that had not received much moisture since mid-July. The rain couldn't have come at a better time because crops are in their crucial reproductive stages. Soybeans in particular need the moisture to help pods fill out normally. Losses were tempered, however, amid views that crop tours will find production to be smaller than USDA estimates, said analyst Williemae Bibbs at Allendale Inc., a futures brokerage firm in Crystal Lake, Ill.. Wheat for December delivery rose 7.5 cents to $4.645 a bushel; November soybeans fell 5.75 cents to $7.71; December corn dropped 1.75 cents to $3.4125 a bushel; December oats rose 5.75 cents to $1.9475 a bushel. USDA officials last week predicted overall production would climb 18 percent over 2010 production. But the figure is not high enough to ease a supply crunch that caused stocks to fall to 22-year lows this year and led to spot shortages around the country. Wheat futures initially fell in sympathy with corn and soybeans, but prices rebounded 16 cents in volatile trading amid news Egypt had bought 150,000 tons of soft white winter wheat. Jordan, Taiwan, Bangladesh and Sri Lanka also were said to be seeking 100,000 tons each of U.S. wheat by the end of the month. Weekly export figures released by the Agriculture Department early Monday showed foreign countries bought 25 million bushels of wheat last week -- slightly better than predictions. The move indicates foreign buying could be on the upswing again, said analyst Marty Colgan at commodity firm LFG in Chicago. ENERGY: September crude oil and petroleum products futures prices settled stronger Monday on the New York Mercantile Exchange, ending at new lifetime highs. September crude rose 60 cents to $23.26 a barrel ahead of its expiration Tuesday, after pushing through resistance at $22.90 and $23.00 and attracting fresh technical buying interest. The contract peaked at $23.35 late in the day, a new four-month high on the spot continuous chart. September gasoline settled at 65.27 cents a gallon, up 1.89 cents, after jumping to 65.40 cents. The contract led the early session strength on speculative fund buying after pushing through 63.50, according to market watchers. September heating oil settled at 62.58 cents a gallon, up 0.95 cent, slightly off its late session top at 62.85, also a four-month high on the spot continuous chart. PRECIOUS METALS: Prices of precious metal futures rose on the Comex division of the New York Mercantile Exchange, riding the coattails of silver, which broke through technical resistance of $5.13-$5.15 an ounce. There was no fundamental news to prompt silver's sudden rise, said Stormy Cassie, a commodities analyst with Dean Witter Reynolds in Chicago. Gold for December delivery rose $1 to $392.40 an ounce; September silver gained 13.3 cents to $5.21 an ounce.
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