Wheat and soybean futures prices were sharply lower and corn was moderately lower Thursday on the Chicago Board of Trade.
A report that Agriculture Secretary John R. Block was considering lowering the loan rate that farmers can receive from the government for putting their grains into reserve triggered much of the selling, said Dale Gustafson, a grain analyst in Chicago with Drexel Burnham Lambert.
The existing loan rates are $3.30 a bushel for wheat and $2.55 a bushel for corn. Prices seldom fall below the loan rate, as farmers generally put their grain into the reserve program if they can't make that much on the open market.
"If he (Block) were to do so, the price floor might be lower than we though before," Gustafson said.
Spokesmen for Block and the Agriculture Department later denied that such a reduction was being seriously considered.
Soybean prices already were under pressure from developments in the soybean oil market, Gustafson said. Oil prices came under pressure early in the session when 300 contracts were registered for delivery against futures contracts.