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News Summary: Corn, beans hinge on rain forecast

Associated Press Modified: July 27, 2012 at 3:16 pm •  Published: July 27, 2012

Corn and soybean prices closed higher Friday after a bouncy week linked to changing weather patterns.

Corn and soybeans each rose 2.2 percent after forecasts indicated that rain may be scattered and light over regions filled with fields of withering crops. The prices changed course several times this week as predictions for rain shifted.

Weather forecasts have taken on more importance because corn and soybeans have been damaged by searing heat and a devastating drought that is dominating much of the country.

It's a critical time in the growing season so the longer the crops go without rain, the more irreversible damage is likely to occur. That could leave inventories of corn and soybeans at very low levels after the harvests.

The quality of the corn crop primarily east of the Mississippi River has deteriorated sharply, said Sterling J. Smith, vice president at Citibank Institutional Client Group.

Conditions continue to worsen for soybeans, so significant moisture needs to fall by the second week of August to help the crop, Smith said. "They're just up against the clock and that clock is ticking," he said.

Corn for December delivery rose 17 cents to finish at $7.9325 per bushel, November soybeans gained 34.25 cents to $16.0175 per bushel and September wheat rose 14 cents to $8.98 per bushel.

In other news, most commodity prices climbed on hopes that European leaders will take definitive action to repair the region's fragile economy.

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