Commodities : Tuesday, Jan. 14, 1986 : Grain Futures Weakened
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Newly announced government loan rates weakened grain futures prices, and to some extent soybeans, in trading Tuesday at the Chicago Board of Trade.
Prices were mixed at the close, with some good commercial buying lending support as well as renewed concern over the soybean crop in Brazil, analysts said.
The pressure from the loan rates, announced Monday by Agriculture Secretary John Block, was applied mostly on contracts for delivery in the more distant months.
Weather reports out of Brazil, where a drought has been severely stressing the soybean crop, drove futures prices higher for the nearby contracts. Analysts said rain that had been predicted for Wednesday and Thursday have been taken out of the latest forecasts.
Block reduced loan rates for wheat and corn to the lowest point allowable under the new farm bill. Traders had been expecting cuts in the loan rates, but not the maximum reductions, said Victor Lespinasse, an analyst with Dean Witter Reynolds Inc.
The 1986 price support loan levels are $2.40 a bushel for wheat and $1.92 for corn.
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