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Markets fall from liquidation, crop estimates

Agriculture.com Staff 10/02/2007 @ 2:18pm

In just three trading days, corn prices have dropped 41¢, soybeans 75 1/2¢, and wheat 39 1/4¢, on the Chicago Board of Trade futures market.

On Tuesday, November CBOT soybeans dropped 47.75 cents to $9.437. December corn fell its 20-cent daily limit to $3.487. Also, December wheat closed down its 30-cent daily limit at $9.225.

This lower trading action is seen holding on for at least one more day, analysts say.

The sharply lower prices follow a turnaround in the higher U.S. dollar and trade liquidation, analysts say.

Alan Kluis, Kluis Commodities, says there is a general liquidation of commodities. "Gold, crude oil, and the commodity index are all down. Sometimes, it's not about the supply/demand of the crops, but the supply/demand of the money," Kluis says.

Don Roose, U.S. Commodities, says the larger reported yields are weighing on the market.

"Yesterday, one private market service estimated this year's U.S. corn crop at 13.44 billion bushels, the soybean crop at 2.722 billion. Those are huge numbers," Roose says.

Roose adds, "This gives the impression that more private estimates will be large. Plus, the market begins to think the USDA will come out with a big crop size estimate next week."

Meanwhile, overnight, the U.S. dollar strengthened. As that took place, gold, crude oil, and the basket of grain commodities all were pressured.

In just three trading days, corn prices have dropped 41¢, soybeans 75 1/2¢, and wheat 39 1/4¢, on the Chicago Board of Trade futures market.

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