S.A. rains send soybeans sliding
U.S. corn and soybean futures fell Wednesday on a wetter weather forecast for Argentina, where dry weather in the last few weeks has started to threaten crops.
Chicago Board of Trade March corn futures settled down 6 1/2 cents or 0.9% at $7.22 1/2 a bushel.
March soybeans settled down 8 cents or 0.5% at $14.87 1/2 a bushel.
Dry weather in Argentina and parts of southern Brazil has boosted corn and soybean prices in the last few weeks. Soybeans are at greater risk since much of Argentina's corn crop has already finished its delicate pollination phase, but corn futures are also influenced by changes in soybean prices since the two commodities compete for planted acreage on U.S. and South American farms.
Weather outlooks turned wetter for Argentina in the period 10 days from now, predicting likely rain around Feb. 16-20.
Such long-term forecasts often change, but the increased possibility of rain still led some market participants to exit earlier bets on higher prices by selling futures.
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"We're seeing longs take some of the weather premium risks out of the market," said Tim Hannagan, grain specialist with brokerage Alpari LLC in Chicago.
"Near term, through at least next Wednesday or Thursday, we're going to continue to be warmer and drier than normal. But it's the long-term forecast that's starting to get a little more in agreement" about the chances of rain, Mr. Hannagan said.
Corn was also pressured by concerns about weak demand. U.S. government data on Wednesday showed domestic ethanol production last week recovered slightly but remained low. Production rose 0.5% to 774,000 barrels a day, compared to the prior week's output of 770,000 barrels a day, which was the lowest weekly level since record-keeping began in mid-2010.
Many analysts expect the U.S. Department of Agriculture, in a monthly world crop report due Friday, to cut its forecasts for corn demand from U.S. ethanol producers and foreign buyers.
Wheat futures rose on Wednesday, boosted by short-covering and bargain-hunting activity after prices fell over the last week. CBOT March wheat on Tuesday had settled at a three-week low.