Commodities : Wednesday, July 30, 1986 : Drought Boosts Soybeans

Prospects for a worsening drought in the Mississippi Delta propelled soybean futures ahead strongly Wednesday on the Chicago Board of Trade.

In other markets, livestock and meat futures settled sharply lower, coffee plunged the limit 4 cents a pound, cotton advanced strongly and oil moved higher.

“Beans started strong and they were supported all day,” said Victor Lespinasse, a trader with Dean Witter Reynolds Inc. “The tropical depression in the Gulf of Mexico broke up and headed for Texas (instead of bringing moisture to the Southeast).”

In addition, both the 6-to-10-day and 30-day National Weather Service forecasts call for continued dry conditions. Soybeans surged ahead as much as 9 cents before falling back.

Wheat futures advanced fractionally after news the House Agriculutre Committee approved expansion of the export bonus program to such customers as the Soviet Union and China.

But the effect of the news was “partly discounted because administration sources still say they have grave reservations about the concept” and a veto by President Reagan looms, said Dale Gustafson, an analyst with Drexel Burnham Lambert Inc.