September 7, 2012 / 9:52 AM / 8 years ago

GRAINS-Soybeans drop on profit-taking as rains may boost yields

* Soybeans shed 0.6 percent, down first week in six
    * Rain seen helping drought-hit crop; USDA update awaited
    * Wheat jumps 1.5 percent on supply worries, weak dollar
    * Corn firm in narrow range amid drought-reduced crop

 (Updates with closing prices, weekly performance, fund
buying/selling totals)
    By Karl Plume
    CHICAGO, Sept 7 (Reuters) - Soybean futures fell for a third
straight day on Friday and snapped a five-week winning streak,
as investors banked profits and recent rains in the farm belt
looked set to help some of the crop recover from the worst
drought in half a century.
    A lower-than-expected U.S. production forecast from closely
followed analytical firm Informa Economics lifted soybeans from
early lows, but the market slipped as investors squared
positions ahead of the weekend and ahead of next week's monthly
government supply-demand report.
   "It appears that the weather we had in the last part of
August was beneficial for the soybean crop so some people are
taking some money off the table today," said Karl Setzer, market
analyst with MaxYield Cooperative.
    Wheat jumped 1.5 percent on concerns about thinning global
supplies due to adverse weather in key exporting nations,
including Russia and Australia. The dollar's 1 percent drop
after a weaker-than-anticipated jobs report offered further
support. A weaker dollar makes U.S. exports more competitive in
the world market.
    Corn inched higher on spillover support from wheat, but
remained bound in a recent trading range as investors awaited
next week's U.S. Agriculture Department report which was
expected to show a sharply reduced U.S. crop.
    Chicago Board of Trade new-crop November soybeans 
fell 10-1/2 cents, or 0.6 percent, to $17.36-1/2 a bushel. The
benchmark contract declined 1.1 percent this week after five
straight weeks of gains.
    Commodity funds sold an estimated net 5,000 soybean
contracts on the day, trade sources said. 
    Earlier in the day the market bounced after analytical firm
Informa Economics cut its U.S. soy crop forecast by 5 percent to
2.639 billion bushels in a midmorning report, a deeper cut than
many had expected. 
    Private analysts on average expected the USDA to trim its
crop forecast next Wednesday to 2.657 billion bushels from 2.692
billion in August, although some expected a slight increase
because of rains in recent weeks across northern and eastern
Midwest. 
    
    WHEAT RALLIES
    Wheat futures jumped for a second straight day in the
strongest two-day rally since mid-July on continued concerns
about weather-reduced global supplies and possible export curbs
from major suppliers in the Black Sea region.
    Dry weather in key production areas of Australia, the
world's No. 2 exporter, and a dry pattern in the southern U.S.
Plains wheat belt ahead of autumn planting added support.
    CBOT December wheat rose 13-1/4 cents, or 1.5
percent, to $9.05 a bushel. Climbing for a second straight week,
the 1.7 percent weekly gain was the strongest in eight weeks.
    Commodity funds bought a net 3,000 wheat contracts on the
day, trade sources estimated.
    Corn futures rose modestly, supported by expectations for
another deep cut by the USDA to its production forecast next
week, although prices remained in a recent narrow range near $8
per bushel. 
    Analysts on average expected the government to reduce its
corn production forecast to 10.380 billion bushels, down 3.7
percent from its August forecast and the lowest in nine years.
 
    New-crop CBOT December corn added 1 cent to settle at
$7.99-1/2 a bushel, essentially unchanged from a week ago. 
    
 Prices at 2:35 p.m. CDT (1935 GMT)      
                              LAST      NET    PCT     YTD
                                        CHG    CHG     CHG
 CBOT corn                  799.50     1.00   0.1%   23.7%
 CBOT soy                  1736.50   -10.50  -0.6%   44.9%
 CBOT meal                  527.20    -1.10  -0.2%   70.4%
 CBOT soyoil                 56.24    -0.70  -1.2%    8.0%
 CBOT wheat                 905.00    13.25   1.5%   38.6%
 CBOT rice                 1495.50    33.00   2.3%    2.4%
 EU wheat                   264.50     3.00   1.2%   30.6%
 
 US crude                    96.31     0.78   0.8%   -2.5%
 Dow Jones                  13,285       -7  -0.1%    8.7%
 Gold                      1735.30    34.26   2.0%   11.0%
 Euro/dollar                1.2795   0.0167   1.3%   -1.2%
 Dollar Index              80.2650  -0.7750  -1.0%    0.1%
 Baltic Freight                669       -6  -0.9%  -61.5%
   
    * CBOT futures in cents per bushel, Paris futures in euros
per tonne, London wheat in pounds per tonne.
    

 (Additional reporting by Gus Trompiz in Paris, Naveen Thukral
in Singapore; Editing by Alison Birrane and Bernadette Baum)
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