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Mid-day prices on the CBOT are higher

Agriculture.com Staff 10/09/2007 @ 10:10am

At mid-day, the wheat, corn, and soybean prices on the CBOT are higher.

Jason Ward, Northstar Commodity Investment Co. says the corn market is nearing resistance levels. A return to higher prices may be around the corner.

Another day of support in the corn, as prices continue to hold support at $3.35 Dec 07. "We are approaching resistance now and one has to be careful that this is nothing more than a bear market rally. If we can close Dec 07 corn above $3.51, it would confirm a short-term low has taken place and the market would be poised for a rally back to $3.70/bushel. It has to close above $3.51 to confirm this," Ward says.

On the fundamental side, ocean freight rates are a concern as they have soared to record highs, Ward says.

"What this does is make it more expensive to get US corn into the export market. For example, US corn from the Gulf of Mexico into Asia (our largest buyer) is over $7.00/bushel delivered. $3.45 Dec 07 futures plus 60-cents to get it to the Gulf, and then tack on the freight rate of $3.00/bushel and you have a delivered price of $7.05/bushel," Ward says.

Ward adds, "This could hurt US corn demand in the coming weeks. Just this morning S. Korea passed on 12 million bushels of corn from the US, citing this freight rate as the reason. They did, however, buy 2.1 million bushels of NON-GMO corn from Cargill."

Another round of short-covering here in the beans have prices testing the resistance at $9.58 in the Nov 07. "Closing over $9.58 would open the door for a test of $9.95, but wait for the close before you get too friendly. We are hearing some impressive bean yields coming out of Iowa," Ward says.

More export wheat business this morning from S. Korea buying 2.3 million bushels, Iraq buying 11 million bushels, all from the US. So, demand is starting to pick up. Egypt was also in buying 7 million bushels from Russia. So, as prices are falling on wheat, we are starting to see some good business coming back, Ward says.

At mid-day, the wheat, corn, and soybean prices on the CBOT are higher.

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