Beans, corn drop as rain heads into Midwest

AP News
Posted: Jul 24, 2012 4:02 PM
Beans, corn drop as rain heads into Midwest

Prices for corn and soybeans are falling as rain heads into parts of the parched Midwest.

Soybeans fell 3.3 percent Tuesday and corn dropped about 1 percent. It's the second day of declines for both crops after they set record high prices last week.

Conditions for corn and soybeans have been deteriorating since blistering, dry heat settled over the Midwest last month. That sent prices climbing on expectations that both crops would produce smaller harvests than anticipated at time when inventories already are low.

About 45 percent of the corn crop was in very-poor-to-poor condition, with about one-fourth in good-to-excellent condition, according to an U.S. Agriculture Department report issued Monday.

Soybeans have fared a little better because they are planted later. About 35 percent of the crop was in very-poor-to-poor condition and 31 percent was in good-to-excellent condition.

The rain probably is too late to help salvage much of the corn crop, but it may benefit at least some of the soybeans, which still are in critical growing stages, said Mike Zuzolo, president of Global Commodity Analytics & Consulting LLC.

That has prompted traders to sell contracts for a profit in case the harvests turn out to be bigger than anticipated.

Soybeans for November delivery fell 52.75 cents to finish at $15.695 per bushel and December corn dropped 7.25 cents to $7.7825 per bushel. September wheat ended down 34 cents, or 3.7 percent, at $8.7875 per bushel.

Other commodities were mixed as worries grew about the fate of financially troubled Spain. The country's borrowing rates have hit levels considered unsustainable over the long run, which may force it to seek bailout funding from other countries that use the euro.

The problem for the other countries is that Spain is fourth-largest economy in the union so a bailout will cost more than it did for Greece, Ireland and Portugal.

In metals trading, August gold fell $1.20 to end at $1,576.20 per ounce and September silver dropped 23.1 cents to $26.811 cents. September copper decreased 2.7 cents to $3.353 per pound; October platinum fell $12.30 to $1,386.60 an ounce and September palladium ended down $9.35 at $561.60 an ounce.

Benchmark oil rose 36 cents to finish at $88.50 per barrel. Heating oil gained 0.55 cent to $2.8244 per gallon, wholesale gasoline dropped 5.81 cents to $2.8248 per gallon. Natural gas rose 7 cents to $3.187 per 1,000 cubic feet, which was the highest level since December.