Newspaper article THE JOURNAL RECORD

Corn, Soybean Futures Increase

Newspaper article THE JOURNAL RECORD

Corn, Soybean Futures Increase

Article excerpt

Corn futures prices soared the daily trading limit Tuesday on the Chicago Board of Trade after the government reported a dry spell last month will drastically cut fall production. Declining crop ratings pointed to an even worse crop figure.

Soybeans futures also rose. On other markets, crude and gasoline rose sharply amid expectations of tightening supplies, while coffee futures plummeted as roasters delayed buying new stocks.

The emphasis on the Board of Trade has suddenly turned back to corn after weeks of speculation about the fate of the soybean crop, which is in its key flowering stage in which pods fill with beans. The U.S. Agriculture Department estimated corn production at 9.28 billion bushels, up about 1 percent from last year but sharply below the agency's July estimate of 9.7 billion bushels. Most analysts had expected production to fall to 9.567 billion bushels because of dryness during July in the Midwest that reduced yields during the critical period in which kernels form. But the crop's condition continues to show deterioration. The USDA said 58 percent of the crop was in good or excellent condition last week, down a steep 8 percentage points from a week earlier. "It's looking like things are going to be a lot snugger than we thought," said analyst Dale Gustafson at Smith Barney. "There are still areas of the eastern Corn Belt that have had little rain, and with each passing day it's a concern. That could cause a serious problem if there is unexpectedly heavy domestic feed demand." China's production figure also was slashed because of drought, which will prevent it from exporting large quantities to Asian neighbors. Those countries instead may have to turn to the U.S. market for corn, Gustafson said. Soybean futures prices rose, despite the USDA pronouncement that farmers will produce a record 2.74 billion bushel soybean crop. …

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