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All markets finish lower

06/21/2012 @ 9:39am

DES MOINES, Iowa (Agriculture.com)--Midwest rainfall and a broadbase sell-off doomed the CME Group corn, soybean and wheat markets Thursday.

The July corn futures settled 23 3/4 cents lower at $5.88, while the Dec. contract closed 15 1/2 cents lower at $5.51. The July soybean contract finished 7 1/2 cents lower $14.39, while the Nov. 2012 contract closed 22 1/2 cents lower at $13.73. The July wheat futures settled 2 cents lower at $6.62. July soyoil futures settled $1.01 lower at $49.80. The July soymeal futures finished $1.90 higher at $429.30. 
In the outside markets, the NYMEX crude oil is $2.74 per barrel lower, the dollar is higher and the Dow Jones Industrials are 210 points lower.

Tim Hannagan, PFGBest.com senior grain analyst, says there remains to be two-sided trading in corn and beans. "They (traders) sell strength off of the overnight rains, but buy the dips on thoughts that next week is setting up dry."

Soybeans keep hitting that $13.95 chart resistance and then sell-off, he says. "But, if next week sets up dry, we should take it out Sunday," Hannagan says.

Most traders are happy to sell corn with better weather, one CME Group floor trader, requesting anonymity, says.

"The sellers are counting on the large acres and rationed ethanol demand. But, we are losing yield. The average trade guess, right now, is 159-161 bushels per acre. If we get below 155 bu./acre the implied corn surplus is gone," the trader says. 

 Meanwhile, the large crop loss in South American soybeans, last winter, is being felt more and more, he says. "With interior premiums in Brazil now above exporters bid, it's effectively cutting off bean supplies from South America." 

The most bearish thing for corn, at the moment, is the declining energy markets, he says. 

"This is putting index players on the sidelines. Notice the steady leak in index interest in commodities. It's not germane to the over-all fundamental for crops, if weather is threatening. But, it does impact short term money flows."

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