Soybean futures rose even as grain prices slumped on Tuesday, with ongoing concerns about the oilseed crop driving the market higher.
The U.S. Department of Agriculture said on Monday that the share of soybeans in good-or-excellent condition rose to 60% as of Sunday from 59% a week earlier. But that improvement was overshadowed by ongoing concern about drier forecasts in the Midwest just as oilseed plants pass through their crucial pod-setting phase.
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Analysts said the fate of the soybean crop could vary depending on how much rain it gets in August. Forecasters expect dryness to continue in parts of Midwestern states like Illinois and Iowa for the foreseeable future.
"They still need a general soaking rain across the Midwest to finish out," said Doug Bergman, director of agricultural trading at RCM Alternatives in Chicago.
Though too early for authoritative estimates, analysts expect the USDA to lower its soybean yield forecast in a supply-and-demand report on Thursday.
Soybean futures for September delivery rose 0.3% to $9.67 a bushel at the Chicago Board of Trade.
Grain futures, meanwhile, fell after rising overnight as traders took profits on recent rallies.
Both U.S. corn and spring wheat crops nevertheless face considerable difficulty, analysts say, after one of the most erratic growing seasons in recent years. The USDA said on Monday the proportion of good-or-excellent-rated corn fell to 60% from 61% a week earlier, while spring wheat climbed to 32% good or excellent from 31%.
A global grain glut has nevertheless limited buying even as problems continue.
"Corn and wheat have succumbed to some 'Turnaround Tuesday' selling," Dave Marshall, farm-marketing adviser at First Choice Commodities in Nashville, Ill., said in a note to clients. "Traders remain concerned about dry soils in the western Corn Belt and growing dryness in Illinois. Gains continue to be restrained by ideas that global supplies remain ample."
CBOT September wheat futures fell 1.4% to $4.57 a bushel while September corn dropped 0.7% to $3.69 3/4 a bushel.
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(END) Dow Jones Newswires
August 08, 2017 15:52 ET (19:52 GMT)