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Cooler, wetter weather outlook drags on CBOT soybeans

Half of U.S. crop belt seen getting rain this weekend

U.S. soybean futures sank to a one-week low on Friday on forecasts for rain and cooler temperatures to relieve stressful crop conditions across the U.S. Midwest grain belt.

Wheat and corn futures were mixed.

Worries about crop damage from hot and dry weather have supported the soy market recently, with the new-crop November contract rising to an 11-month high earlier this week. But prices began to pull back on Thursday as meteorologists called for more rain over the coming weekend.

Midday forecasts on Friday showed even more precipitation than previously expected for the next six to 10 days, said Anthony Chipriano, a meteorologist for MDA Weather Services.

November soybeans ended down 11 cents at $13.57-1/2 a bushel at Chicago Board of Trade. December corn rose 1/2-cent to $4.82/bu. (all figures US$).

"Weather forecasts are showing some degree of improvement and this is easing the market's fears," said Sterling Smith, futures specialist for Citi.

Traders are closely following weather forecasts because soybeans are in a critical stage of development and a large harvest is needed to replenish inventories that are estimated at a nine-year low.

Worst is over?

The outlook for beneficial improving crop conditions next week overshadowed a sale of 110,000 tonnes of U.S. soybeans to China announced on Friday, according to traders.

The "worst of 2013 U.S. summer heat will be over in two days," said Rich Feltes, vice president of research for brokerage R.J. O'Brien.

Still, the U.S. Department of Agriculture, in a weekly report on Tuesday, will likely cut its crop condition ratings for soybeans and corn due to hot, dry weather this week, Feltes said. He predicted a drop of three to five percentage points in the good-to-excellent rating for soybeans and a drop of two to four percentage points for corn.

USDA on Monday rated 58 per cent of the U.S. soybean crop as good to excellent, down four percentage points from a week ago. Corn ratings fell by two percentage points to 59 per cent.

Long weekend looms

Traders will watch for changes in weather forecasts during a long weekend in the United States. U.S. grain markets will reopen at 7 p.m. CT Monday due to the Labour Day holiday on Monday.

"A shift in weather forecasts over the weekend could have massive price implications on Monday night," said Joe Vaclavik, president of brokerage Standard Grain. "This weekend and its accompanying weather forecasts could be a make-or-break situation for the bean market."

Wheat futures were underpinned by demand and concerns about dryness threatening crop conditions in Argentina and Australia, according to traders.

September wheat rose two cents to $6.43-1/4 a bushel.

Egypt's main wheat-buying agency, the General Authority for Supply Commodities, set a tender on Friday to buy an unspecified amount of wheat from global suppliers for shipment Oct. 11-20. Results for the tender should come out after 1:30 p.m. GMT on Saturday.

-- Tom Polansek reports on agriculture and futures markets for Reuters from Chicago. Additional reporting for Reuters by Michael Hogan in Hamburg and Naveen Thukral in Singapore.



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