Soybean futures prices led a modest rally in grain prices Wednesday on the Chicago Board of Trade.
Volume was light and trading was sluggish until prices rallied near the end of the session.
There were few developments to account for strength in grain prices, said Victor Lespinasse, a grain analyst in Chicago with Dean Witter Reynolds. He noted that weather conditions continue to foster good crop development, and corn and soybeans for delivery after the harvest fell to life-of-contract lows before recovering during the late rally.
The rally appeared to be triggered by buying that was coming from a major professional speculator, analysts said.
However, the Agriculture Department fixed the price at which farmers can obtain loans in return for taking their soybeans off the market at $5.02 a bushel, the price that was expected.
Richard Loewy, chief grain and oil seed analyst in New York with Prudential-Bache Securities, said many analysts believe that with all farmers eligible for the program, many will choose to take the loan rather than sell their soybeans.
If farmers keep enough off the market, he said, they could force soybean prices to rally. He noted that sales by farmers have been light with prices at current levels.