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Corn closes lower Friday

08/10/2012 @ 9:43am

DES MOINES, Iowa (Agriculture.com)--Traders are holding contract positions close to the vest waiting for actual yields, sending the CME Group corn market lower Friday.

Today's USDA August Crop Report signaled a bullish market, proving only to be true for soybean prices.

The Dec. futures corn contract closed 14 1/2 cents lower at $8.09 1/4. The Nov. soybean contract finished 12 1/2 cents higher at $16.43 1/2. The Dec. wheat futures closed 25 3/4 cents lower at $9.01 1/4 per bushel. The Dec. soyoil contract ended $1.21 higher at $54.41. The Dec. soymeal futures settled $0.30 per short ton higher at $494.90.

In the outside markets, the NYMEX crude oil is $0.32 per barrel lower, the dollar is higher and the Dow Jones Industrials are 6 points higher.

Tim Hannagan, Alpari LLC senior grain analyst, says the market is trading the 'ole 'buy the rumor, sell the fact' psychology.

"We bought the dry weather all month, on rumor the crop report would lower production and ending stocks. When today's report confirmed the rumor we sold the rally," Hannagan says.


Since there was no surprise, in the report, the trade assumes all the numbers are priced in, Hannagan says. "So, they take profits. All the numbers were at the average pre-report trade guesses. The numbers are historically bullish, going into next year. But, we're poised for a pre- harvest correction, as this report seasonally ends the growing season and the weathers' impact."

Joe Bedore, FC Stone Inc. CME Group floor manager, says the USDA corn yields were not as low as the trade wanted. Thus, the corn market traded lower, following the release of the data at 7:30am CT.

"The USDA estimates U.S. corn production at 10.77 billion bushels, when the trade was looking for a 10.5 billion number, or below," Bedore says.

As a result, traders are hesitant to add to their 'long' positions, until they see yield reports, Bedore says.

"The corn market is taking a wait-and-see attitude. But, if soybeans put in a 40 or 50 cent higher trading day, corn will go up with it," he says.

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