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Crop prices tumble as weather outlook improves in U.S. and Europe

June 22, 2011 |  3:14 pm

Consumers finally have been getting a break at the gas pump. Could a break at the grocery store be next?

Corn, wheat and soybean prices have been sliding in recent weeks, and all three key commodities fell sharply Wednesday on speculation that improving weather could boost crop production this year in the U.S. and Europe.

Near-term corn futures in Chicago plunged the daily limit of 30 cents, or 4.4%, to $6.50 a bushel, the lowest price since mid-March.

Wheat futures slid 32.25 cents, or 4.6%, to $6.73 a bushel, also the lowest since mid-March.

Soybeans fell 17.25 cents, or 1.3%, to $13.32 a bushel, a six-week low.

From Bloomberg News:

Hot weather next week in the U.S., the world’s largest exporter of all three crops, may be shorter than forecast, aiding newly planted corn and soybeans, according to World Weather Inc. Rain is forecast in Ukraine and Russia, and moisture this month in Europe may limit wheat-crop damage caused by drought in France and Germany, Alfred C. Toepfer International GmbH, a grain trader, said in a report.

“It’s looking more like a classic performance of a bull market having run out of gas,” said Dale Durchholz, the senior analyst for AgriVisor LLC in Bloomington. “Buying interest is lacking with the good grain harvests expected out of the Ukraine and Russia this year and U.S. crops improving.”

Corn prices have tumbled 17% from a three-year high of $7.85 a bushel June 9. Wheat's high for the year so far was $9.04 a bushel Feb. 14. Soybeans hit $14.51 in early February.

Still, grain and bean prices remain far above their levels of a year ago, when corn cost $3.72 a bushel, wheat went for $4.75 and soybeans cost $9.36.

-- Tom Petruno