COMMODITIES : Rain Puts a Damper on Soybean Prices

Prices of soybean futures tumbled to a 12-week low of $8.07 a bushel Tuesday on the Chicago Board of Trade in reaction to rain and cooler weather in the drought-stricken Farm Belt.

Corn and oat futures also moved lower while wheat advanced.

On other markets, cotton, coffee and energy futures fell sharply; precious metals were mixed; livestock and meat futures were mixed, and stock index futures advanced.

The Agriculture Department said soybeans suffered immense stress in last week’s heat wave, and private analysts predicted that the USDA would again lower its soybean production estimate in its Sept. 12 crop production report.

But the market ignored those bullish factors and focused on recent rain and cooler temperatures in the Midwest.

“It’s looking pretty good for the beans,” said Richard Loewy, senior grain and oil seed analyst with Prudential-Bache Securities Inc. “With the moisture that has come in, you’re getting some pretty good recovery yield reports.”

Demand for U.S. soybean products remained flat.

Wheat settled unchanged to 5 cents higher, with the contract for September delivery at $3.86 a bushel; corn was 3.50 cents lower to 0.25 cent higher, with September at $2.7375 a bushel; oats were unchanged to 1.50 cents lower, with September at $2.4750 a bushel, and soybeans were 5 cents to 34 cents lower, with September at $8.07 a bushel.

Cotton futures fell sharply on the New York Cotton Exchange after the USDA’s decision late Monday to revise the cotton program to make U.S. cotton more competitive on the world market, said Ernest Simon of Prudential-Bache.

The price support program has kept the price of U.S. cotton significantly higher than that produced by other nations despite abundant U.S. supplies.

Cotton for October delivery traded down the 2-cents-a-pound daily limit during the session but closed 1.80 cents lower at 50.50 cents a pound.

Coffee futures prices plummeted near the close on mostly technical factors, analysts said.

The September contract settled 4.04 cents lower at $1.2122 a pound.

Oil futures prices declined in light trading on the New York Mercantile Exchange amid investor anticipation of higher oil product inventories, analysts said.

In a report issued after the close, the American Petroleum Institute said that although stocks of gasoline and distillates rose last week, crude oil inventories declined by nearly 4.3 million barrels.

Analysts had expected a buildup of 2 million to 4 million barrels of crude.

The API reported gasoline stocks were up 349,000 barrels and distillate stocks rose 2.1 million barrels.

West Texas Intermediate crude oil settled 21 cents to 31 cents lower, with October at $15.70 a barrel; heating oil was 0.47 cent to 0.79 cent lower, with September at 44.03 cents a gallon, and unleaded gasoline was 0.18 cent to 0.34 cent lower, with September at 47.18 cents a gallon.

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