Beans join bear party

Soybeans fell in Chicago, trading near the lowest since 2010, on speculation that rain forecast for the U.S. will ease recent dry weather that threatened to cut yields in the world’s top grower. Corn also declined.

Rain in the next few days will be heaviest in the western Midwest and temperatures probably will be below normal in much of the Corn Belt, QT Weather said in a report. U.S. soybean (CBOT:ZSQ14) and corn (CBOT:ZCU14) production may top records at 3.865 billion bushels and 14.455 billion bushels, respectively, bigger than the U.S. Department of Agriculture estimates, INTL FCStone Inc. said yesterday. The USDA is set to update its crop forecasts Aug. 12.

“Expectations are for some very big harvests,” Tom Pugh, a commodities economist at Capital Economics in London, said by telephone today. “There’s no real reason why prices can’t trend still a little lower.”

Soybeans for November delivery retreated 1.5% to $10.63 a bushel by 7:05 a.m. on the Chicago Board of Trade. Futures touched $10.54 yesterday, the lowest since October 2010, before rebounding to settle 2% higher amid signs of increasing demand for U.S. exports and concern about dry weather in some areas. Prices have slumped 18% this year.

Corn for delivery in December fell 1.1% to $3.6525 a bushel, after climbing 1.9% yesterday. The grain has dropped 13% this year.

Seventy-one percent of soybeans in the main U.S. growing areas were in good or excellent condition as of Aug. 3, unchanged from the previous week and the highest for the date since 1994, USDA data show. About 73% of corn crops were rated good or excellent, down from 75% a week earlier, according to USDA’s report released yesterday.

Wheat (CBOT:ZWU14) for September delivery fell 0.6% to $5.4075 a bushel in Chicago. The grain climbed 4.5% in the prior four sessions amid speculation that demand will increase for U.S. supplies as excess rain in France and Germany eroded the quality of crops from Europe’s top two producing countries.

In Paris, milling wheat for November delivery dropped 0.1% to 173 euros ($231.56) a metric ton on Euronext.

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