Soybean Futures Tumble

Soybean futures prices fell sharply Friday as Congress took a hard look at lowering the loan rate for soybeans under a plan suggested by an association of soybean farmers.

Weakness in the soybean pit drove corn prices down as well, but wheat prices shook off the pressure and posted a surprising rally.

Soybeans came under pressure once again from growing anticipation that the government will lower the loan rate for soybeans when it passes a new farm bill, said Bob Lekberg, a grain analyst in Chicago with Shearson Lehman Bros.

The American Soybean Assn. proposed such a plan, asking that the Agriculture Department lend farmers $4 a bushel for soybeans they put in the reserve program rather than the $5.02 currently paid. The plan also asks for direct cash payments to farmers to offset the lower loan rate. The cash payments, beginning at $50 an acre, would be phased out over a five-year period.

Soybean oil and meal were lower as well Friday, as European buyers have filled their needs for the remainder of the year, Lekberg said.