Chicago | Reuters — Chicago Board of Trade grain and soybean futures slid on Monday after beneficial rains hit Argentina’s drought-stricken agricultural zone, analysts said.
Argentina is the world’s leading exporter of processed soy, but its usually green Pampas plains have been hit by a historic drought that is preventing many farmers from planting their fields.
Rain showers crossed Argentina on Friday and Saturday, bringing needed moisture to just over half its corn and soy area, Commodity Weather Group said. More limited rains next week will allow crop stress to expand, the firm said.
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The weekend showers helped drive down futures prices at a time when the United States faces competition for export business from South America, and Brazil will soon harvest its next soybean crop, said Don Roose, president of broker U.S. Commodities.
“At these levels, with the competition in the world, if the weather pattern changes at all, there’s premium that can come out of the market,” Roose said.
The most-active soybean contract on the Chicago Board of Trade closed down 19-1/4 cents at $14.60-3/4 a bushel (all figures US$). Corn settled down 5-3/4 cents at $6.47-1/4 a bushel, while wheat dropped five cents to end at $7.48-1/2 a bushel.
“We’re a lower volume market, respectful of the rain over the weekend,” Roose said.
Worries over a global economic downturn added pressure to prices, analysts said.
The U.S. Federal Reserve, the Bank of England and the European Central Bank last week revived investors’ recession worries by signalling more interest rate rises to contain inflation.
“The end of the year will be marked by a lot of funds’ profit-taking after several months of very high volatility,” French consultancy Agritel said in a note.
In demand news, exporters struck deals to sell 141,000 tonnes of U.S. corn to Mexico and 132,000 tonnes of U.S. soybeans to unknown buyers, the U.S. Department of Agriculture said.
— Reporting for Reuters by Tom Polansek in Chicago, Naveen Thukral in Singapore and Sybille de La Hamaide in Paris.
