* Forecast rains may boost soy prospects, little help to
* Wheat falls as Iraq's Russian deal eases export curb
* Corn lower on soybean drop, technical selling
(Updates with closing prices, adds new analyst quote)
By Mark Weinraub
CHICAGO, July 26 U.S. soybean, corn and wheat
futures fell on Thursday for their third drop out of four
trading days this week, weighed down by forecasts for rain in
parts of the drought-stricken U.S. Midwest, traders said.
The rains are expected only to benefit soybeans, which lost
3 percent, but corn fell in sympathy on a wave of technical
selling in a market primed for profit-taking after rallying to a
record last week.
"The rain across the Midwest has come too late for corn, but
may benefit soybeans in certain areas," Joe Davis, vice
president for commodity sales for Futures International LLC,
said in a research note.
"Soybeans led the markets lower as the recent rains may stop
some of the damage caused by earlier hot and dry conditions."
Wheat futures were pressured by news of a sale of Russian
wheat to Iraq that cooled talk of possible export curbs in major
The worst drought in more than 50 years in the Midwest grain
belt sparked a month-long grains price rally that saw corn and
soybean prices hitting record highs on Friday, raising concern
about global food prices.
Rain in the northern Midwest this week has likely improved
crop prospects there but heat and dryness in the southwest
continue to stress corn and soybeans, Andy Karst, an
agricultural meteorologist for World Weather Inc, said.
"There should be some improvement in areas like the Dakotas
and Minnesota," Karst said. "They have had some good rains of up
to an inch or more and there should be more rain and more
improvement over the next week."
Light rain fell in parched areas of Nebraska, Kansas,
Missouri, Iowa and Illinois overnight but it was unlikely to
benefit the crops much.
Chicago Board of Trade November soybeans closed down
48 cents at $15.67-1/2 a bushel.
"Everyone has been hoping and praying for some rain and at
least stabilizing things for beans," said Randy Mittelstaedt,
analyst with R.J. O'Brien. "We are moving lower on the Midwest
CBOT new-crop December corn fell 11-3/4 cents to
$7.76-1/4 a bushel while CBOT September wheat dropped
19-1/4 cents to $8.84 a bushel.
Analysts noted corn's struggle to get back above $8 a bushel
as a spur for some of the technical sales.
Disappointing export sales also weighed on corn, soybean and
wheat prices throughout the day. The recent rally has chilled
demand from overseas buyers.
China canceled 240,000 tonnes of new-crop corn, booking
profits for supplies it originally agreed to buy at much lower
prices. Good crop weather in China allowed it to back out of its
"Their production looks encouraging," said Shawn
McCambridge, grains analyst with Jefferies Bache. "Their major
production areas have received basically favorable conditions.
It does not look like they are really going to need those
Declining crop prospects in the Black Sea region have added
to nervousness on grain markets and Wednesday's jump in wheat
prices was fuelled by renewed talk of potential export
restrictions by Russia, two years after an export ban by the
country sent wheat prices rocketing.
Iraq's purchase of 150,000 tonnes of Russian wheat in a
tender, announced late on Wednesday, eased concerns, however,
while pressuring U.S. prices.
Fears of disruption to Russian supply were also calmed by
news that the Russian government has not changed its forecast
for this year's grain harvest, and by comments from the head of
the country's grain union that export limits were not needed.
The International Grains Council cut its forecast of the
world maize crop by 5.8 percent due to the worst U.S. drought
since 1956 and forecast stocks falling to six-year lows.
2:37 PM CDT LAST NET PCT LOW HIGH CURRENT
CHNG CHNG VOL
CBOT SEP 884.00 -19.25 -2.1 873.75 904.50 52,410
CBOT DEC 898.00 -17.75 -1.9 887.00 916.50 38,794
KCBT SEP 888.75 -14 -1.6 880.00 908.00 7,909
KCBT DEC 909.75 -12.75 -1.4 899.75 925.50 5,747
MGEX SEP 970.00 -21.25 -2.2 964.00 992.00 1,425
MGEX DEC 969.25 -22.25 -2.3 963.75 991.50 1,364
TOTAL MARKET VOLUME 30-D ATM VOLATILITY
CURRENT 30D AVG 250D AVG CURRENT CHG
CBOT WHEAT 108,039 96,670 50.2 2.9
KCBT WHEAT 15,267 23,462
MGEX WHEAT 3,116 6,172
In U.S. cents, benchmark contracts, except EU wheat (euros) and
soymeal (dollars). CBOT wheat, corn and soybeans per bushel,
rice per hundredweight, soymeal per ton and soyoil per lb.
(Additional reporting by Sam Nelson in Chicago, Naveen Thukral
in Singapore and Gus Trompiz in Paris; Editing by Marguerita
Choy, David Gregorio and Dale Hudson)