Hot dry weather over the Midwest with more forecast pushed grain futures prices to new highs today on the Chicago Board of Trade. Soybean futures led the advance closing up the 30-cent-per-bushel daily trading limit in contracts for delivery after this years fall harvest. All months set life-of-contract highs and November closed at 6.23 dlrs a bushel. The market is anticipating that it will stay hotter than normal for some time out said David Bartholomew assistant vice president for Merrill Lynch. We have probably gone as high as we need to go at this time but I dont know how to measure the euphoria level. Soymeal futures which led the grain rally last week posted contract highs and ended up the 10 dlr a ton daily limit in new-crop contracts. December closed at 195.70 dlrs. Corn futures set contract highs in March through September with December closing up the 10 cent a bushel limit at 2.11-3/4 dlrs. Wheat posted more modest gains as dry weather improved harvest conditions in the southern Midwest. The hot weather could stress developing corn and soybean plants in the Midwest although some periods of dryness benefit young plants by encouraging the development of deep root systems Bartholomew said. European demand for U.S. soybeans and meal contributed to active buying here and an estimated 2.0 mln bushels of soybean orders went unfilled at the close traders said. After trading ended a U.S. Agriculture Department (USDA) meteorologist said the U.S. corn and soybean crops have not suffered any yield loss yet from hot dry weather. Strong grain futures ignored weakness in the value of the dollar which can depress prices by making grains more expensive for foreign buyers. But the surge in soybeans encouraged buying at New Yorks COMEX where silver futures recovered from early lows to settle steady. Managed fund traders bought silver on the belief that the weather-spurred jump in grain futures will revive fears of inflation. But the weak dollar pressured COMEX gold futures which closed down following last Fridays news of improved U.S. trade deficit figures and better U.S. producer prices. A USDA report released after trading said the number of cattle being fed in seven major producing states was above levels expected by traders. Traders said the report would probably push live cattle futures lower tomorrow at the Chicago Mercantile Exchange. USDA put cattle-on-feed in the seven major states at 7.52 mln head 106 pct of a year ago and at the high end of trade forecasts. A total of 1.954 mln head were placed on feed during May up 111 pct from a year ago and May cattle marketings were off 93 pct at 1.524 mln head USDA said. Cattle futures closed mixed in choppy trading today as hot weather slowed consumer demand for red meat traders said.
HOT WEATHER PUSHES CBT GRAINS TO NEW HIGHS