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Monday, June 23, 2008 - Page updated at 03:10 PM

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Soybeans decline as warm weather boosts planting

Soybean prices declined Monday as dry Midwest weather allowed farmers to resume planting after massive flooding that engulfed fields and drove agriculture futures to record highs.

AP Business Writer

NEW YORK —

Soybean prices declined Monday as dry Midwest weather allowed farmers to resume planting after massive flooding that engulfed fields and drove agriculture futures to record highs.

Other commodities traded mixed, with crude oil gaining and gold, silver and copper prices falling.

Warm, dry weather has returned to Midwestern states and is expected to hold for the near term, giving soybean farmers a chance to finish spring planting cut short by devastating floods in the region over the last two weeks. The government next week will give a partial idea of how many acres were lost, though some estimates say 2 million acres or more were affected; before the floods, farmers were expected to plant 86 million acres of corn.

The improved weather conditions pushed soybeans lower, with the November contract falling 6.5 cents to settle at $15.025 a bushel on the Chicago Board of Trade, after earlier dipping as low as $14.76 a bushel.

"There's drier weather in the forecast and that actually is going to affect soybean supply because there are still people planting," said Elaine Kub, analyst with DTN in Omaha.

Corn futures ended the day slightly higher after an initial drop, but Kub said prices are expected to remain in a holding pattern until farmers get a better idea of the yield size of this year's crop. Corn crops have already emerged in much of the Midwest, but agriculture officials won't have yield estimates until August.

"The issue for corn isn't acres anymore, but yield. That's the big unknown," Kub said. "Cosmetically, these fields look better but that doesn't mean yields will improve," Kub said.

Corn for December delivery rose 3.75 cents to settle at $7.5925 a bushel on the CBOT, after earlier falling to $7.395 a bushel. Wheat prices, meanwhile, settled flat at $8.8425 a bushel on the CBOT.

Corn has jumped 20 percent this month as floods raised fears of a sharp downturn in supplies for a grain already in high demand to feed livestock overseas and to make ethanol in the United States.

In energy markets, oil prices rose Monday as investors appeared disappointed by Saudi Arabia's modest production increase and amid concerns that output from Nigeria will decline.

Saudi Arabia said Sunday at a meeting of oil producing and consuming nations that it would add 200,000 barrels per day in July to a 300,000 barrel per day production increase it first announced in May, raising total daily output to 9.7 million barrels. But that pledge fell far short of U.S. hopes for a larger increase.

Light, sweet crude for August delivery rose $1.38 to settle at $136.74 a barrel on the New York Mercantile Exchange.

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Other energy futures also traded higher. July gasoline futures rose 1.59 cents to settle at $3.4551 a gallon, and July heating oil futures rose 2.58 cents to settle at $3.7975.

In precious metals, gold futures fell sharply Monday after the dollar strengthened against the euro, diminishing the metal's appeal as an inflation hedge.

Gold for August delivery fell $16.50 to settle at $887.20 an ounce on the Nymex, after earlier dipping as low as $877.40 an ounce.

Other precious metals also fell. July silver lost 60.7 cents to settle at $16.795 an ounce on the Nymex, while July copper lost 2.25 cents to settle at $3.8095 a pound.

Copyright © 2008 The Seattle Times Company

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