U.S. grain and soybean futures slid Monday as heavier-than-expected rains benefited crops that had been stressed by heat and dryness.
Corn for December delivery, the most actively traded contract, fell 11 cents, or 1.6%, to $6.74 1/2 a bushel. Soft red winter wheat for September delivery lost 3 3/4 cents, or 0.5%, to $6.88 1/2 a bushel. Soybeans for November delivery dropped 16 1/4 cents, or 1.2%, to $13.72 a bushel.
Prices were driven lower after rain fell in parts of Illinois, Iowa, Ohio and Indiana during the weekend. The rain brought needed relief to the corn and soybean crops after a severe heat wave baked the Midwest last week.
In Iowa, the country's top corn and soybean producer, crops "were looking pretty sick until that rain showed up Friday night," said Jerry Gidel, analyst for North America Risk Management Services, a brokerage in Chicago.
Traders are paying close attention to the weather because farmers need favorable conditions to grow large crops to replenish low inventories. They knocked prices lower after pushing the markets higher Friday on worries hot weather would reduce output.
Corn prices have pulled back nearly 15% since reaching an all-time high in early June on supply concerns. Yet, users of the grain remain nervous about weather threats because supplies are projected to reach a 15-year low.
Crops will avoid significant stress this week, as temperatures will be warm but not extremely hot, said John Dee, president of Global Weather Monitoring, a private weather firm in Michigan. More rains are expected to arrive during the weekend.
Still, last week's heat likely did some damage. The U.S. Department of Agriculture, in a weekly crop report due at 4 p.m. EDT Monday, is expected to cut its good-to-excellent ratings by two to four percentage points for corn and one to two percentage points for soybeans.
"The crop is probably in much better shape in a good chunk of the Midwest [Monday] than it was on Friday," Dee said.
The markets trimmed losses before the close of trading. Wheat futures briefly traded higher as market traders bought back previously sold positions.
Rice futures bucked the weaker trend, surging to a near three-year high on output concerns. September rice climbed 2.5% to $17.15 1/2 per hundredweight.
Ethanol for December delivery fell 0.6% to $2.528 per gallon, and oats for September delivery finished down 0.4% at $3.51 1/2 a bushel. December soymeal dropped 1.7% to $363.10 per short ton, while December soyoil declined 0.9% to 56.95 cents a pound.
At the Kansas City Board of Trade, hard red winter wheat for September delivery sank 1.2% to $7.70 1/2 a bushel. Hard red spring wheat for September delivery slid 0.9% to $8.30 3/4 a bushel at MGEX in Minneapolis.