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Corn closes 'limit' up

Updated: 10/11/2011 @ 2:16pm

DES MOINES, Iowa (Agriculture.com)--With corn finishing 'limit up' and the rest of the CME Group farm futures sharply higher, the stage is set for tomorrow's USDA Crop Production & Supply/Demand Reports.

The floor traders remained stunned that today's market rallied so far, so fast.

The Dec. corn futures closed up it's daily limit of 40 cents at $6.45. The Nov. soybean contract settled 58 cents higher at $12.35 1/2. The Dec. wheat futures settled 49 1/2 cents higher at $6.61 3/4. The Dec. soymeal futures closed $12.10 per short ton higher at $320.60. The Dec. soyoil futures clolsed $2.07 higher at $52.18.

In the outside markets, the NYMEX crude oil is $0.44 per barrel higher, the dollar is lower and the Dow Jones Industrials are down 6 points.

Tim Hannagan, PFGBest.com senior grain analyst, says today's unbelievable market rally was underpinned by plenty of news.

"One, Russia said they may limit exports to half of production to keep grain home to replenish stocks, after the year prior drought drained reserves. This suggests importers may turn to the U.S. to fill needs," Hannagan says. 

The second issue surfaced after the open when the export inspection report showed 23.3 million bushels of soybeans were inspected for near term export. The report shows 15.5 million bushels are going to China versus the four prior weeks of  4.6, 2.5, 6.7,  and 9.5 m.b. 

Corn has now rallied 70 cents since the low Oct.3 , soybeans 78 cents and wheat 55 cents. 

"Out of the last 10 months we have had 8 months where funds have rallied the grains into the monthly crop report from the months opening low. Today's rally now softens the affect of a bullish report Wednesday and strengthens the effect of a bearish report," Hannagan says.

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