Grains-Soy, corn rebound as heat dents US crop ratings

Oil prices dropped 5% on Tuesday to a two-week low, on cautious hopes for a resolution to the U.S. war on Iran as traders assessed developments in the Middle East.

But Don Roose, president of U.S. Commodities, said traders were largely disregarding the pressure on crude oil in the agricultural commodities markets.

That was in contrast to Monday, when soybeans and corn fell sharply, tracking the weakness in crude oil. Prices of agricultural products are often influenced by energy markets because of the rapidly growing use of farm crops in biofuel production.

Chicago corn and soybeans rose on Tuesday, shrugging off a decline in oil prices and recouping some of the previous session's losses after a U.S. government report lowered crop ratings following hot and dry weather.

The most-active corn contract on the Chicago Board of Trade settled up 6-1/2 cents at $4.80-1/2 a bushel, while soybeans rose 6-1/4 cents to finish at $12.20 a bushel.

The U.S. Department of Agriculture said after the market closed on Monday that 63% of the country's corn crop was rated in good-to-excellent condition as of Sunday, down from 67% a week earlier.

Ratings for soybeans declined to 63%, from 66% a week earlier, it said. Ratings for both crops were below the average analyst estimate.

Wheat futures ticked up as market players tried to assess the prospects for negotiations between Russia and Ukraine to keep cargo ships moving through the Black Sea.

Wheat ended up 2-1/2 cents at $6.62-1/2 a bushel.