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Soybeans Close Higher as Excessive Rain in Argentina Threatens Crops; Corn Plunges

Soybeans Close Higher on Argentina Rain; Corn, Wheat Futures Plunge

Soybean futures closed higher Thursday as rain in Argentina threatens production and exports in the South American country. 

Corn prices dropped.

Excessive rainfall has curbed yields in many parts of Argentina, among the world's top producers of soybeans, and has kept farmers from harvesting crops. The affected area has been reported as anywhere from 1 million hectares (about 2.5 million acres) to 10 million hectares.

As much as 3.5 inches of rain fell in northeastern parts of the country yesterday with another 2 inches expected this weekend, according to Commodity Weather Group. Still, drier conditions are expected in the next two weeks, and harvest pace shoudl improve, according to CWG. 

Brazil's soybean crop also is under duress from extremely dry weather, while exports are being threatened by political strife as the country's lawmakers initiated impeachment proceedings against President Dilma Rousseff.

"Brazil dryness continues to cut yields for corn through the weekend in much of the belt," CWG said in a report today. "Showers expand into the southwest half of the belt early next week and ease stress, but likely die out in the north, offering only very limited relief."

Still, global inventories and production of soybeans are forecast to jump to a record this year, according to the U.S. Department of Agriculture, and despite the country's weather woes, Argentina's prices are still lower than those in the states, analysts said. 

Soybean futures for July delivery rose 8.25¢ cents a bushel in trading on the Chicago Board of Trade. Prices jumped 20¢ and 34¢ on Tuesday and Wednesday, respectively.

Soy meal futures gained $7.20 to $328.70 per short ton, while soy oil declined 0.53¢ to 34.51¢ a pound.

Corn prices declined 11¢ to $3.8875 in Chicago.

Wheat futures for July delivery in Chicago dropped 11¢ to $5.0125 a bushel and Kansas City wheat lost 6.5¢ to $4.98 a bushel. 

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