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Weather continues grain market assault

08/01/2013 @ 2:32pm

U.S. grain and soybean futures settled lower Thursday, pressured by favorable weather for crop growth and bearish attitudes among traders.

Chicago Board of Trade September corn futures settled down 11 1/2 cents, or 2.3%, at $4.87 1/2 a bushel, a fresh 2 1/2-year low for the front-month contract.

Generally cool, wet weather in the Midwest is benefiting corn and soybean crops going through key stages of growth. That is boosting the outlook for harvests of the two crops this fall.

The U.S. corn crop is going through its crucial pollination phase, which determines the number of kernels on each ear of corn. Despite worries about dryness in some parts of the Corn Belt, including areas of Iowa and Nebraska, cool temperatures are reducing stress on crops and raising expectations for high crop yields.

"The fact that the temperatures are not very warm right now is still mostly a positive," said Mike Palmerino, a senior meteorologist in Woburn, Mass., for private forecaster Telvent DTN.

However, he added, "In a week when all that corn is pollinated, that will become less positive a factor because crop development is lagging behind normal."

Soybean crops in areas of Iowa, Nebraska and the Dakotas need more rain so they can develop healthily when going through their pod-filling stage this month, but low temperatures are limiting crop stress, Mr. Palmerino said.

A current lack of threats to U.S. crops is fueling bearish sentiment in the grain markets, leading money managers to sell futures, traders said.

"They're kind of in sell mode right now," said Jason Britt, president of brokerage Central States Commodities in Kansas City, Mo. "There's really not anything right now to change their opinion.... The weather's still fairly benign."

Managed funds increased their bearish bets in CBOT grain and soybean markets in the week through July 23, according to the most recent regulatory data available.

A stronger dollar also weighed on grain markets Thursday. The WSJ Dollar Index was recently up 0.82% at 74.67. A stronger dollar can weigh on U.S. agricultural-commodities markets because it makes purchases of U.S. exports more expensive for foreign buyers.

August soybeans, thinly traded ahead of their expiration on Aug. 14, fell 16 1/4 cents, or 1.2%, to $13.57 3/4 a bushel. November soybeans, associated with supplies to be harvested this fall, fell 13 3/4 cents, or 1.1%, to $11.92 1/2 a bushel.

CBOT September wheat fell 6 1/4 cents, or 0.9%, to $6.58 a bushel. KCBT September wheat ended flat at $7.06 3/4 a bushel. MGEX September wheat rose 1/2 cent or, 0.1%, to $7.41 3/4 a bushel.


Write to Owen Fletcher at owen.fletcher@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
August 01, 2013 15:06 ET (19:06 GMT)
DJ UPDATE: U.S. Grains, Soybeans Fall on Favorable Crop Weather->copyright


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