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Corn closes lower

Updated: 09/20/2011 @ 2:55pm

DES MOINES, Iowa (Agriculture.com)--The CME Group corn market pulled back on a more realistic approach to the China corn-buying rumors and harvest pressure. However, wheat and soybean futures prices closed higher Tuesday.

The Dec. corn futures closed 2 cents lower at $6.90 1/4. The Nov. soybean contract finished 2 cents higher at $13.38. The Dec. wheat futures settled 1 3/4 cents higher at $6.74 3/4. The Dec. soymeal futures settled $1.80 per short ton higher at $350.30. The Dec. soyoil futures closed $0.21 lower at $55.63.

In the outside markets, the NYMEX crude oil is $1.05 per barrel higher, the dollar is lower and the Dow Jones Industrials are up 111 points.

Matt Connelly, a CME Group independent floor trader, says Tuesday's lower corn market was a result of what happened Monday.

"Yesterday's market was higher due to corn getting too cheap early. There was technical covering going on," Connelly says. 

Today, the reality of the China corn-buying rumors was put into perspective, he says. "Yes, at some point, there is no doubt that country will need to buy U.S. corn. However, they are only four weeks away from harvesting a new, large crop. So, maybe look for China to be buying corn in January, February, or March."

And even then, it could be that China buys from Argentina or the U.S., Connelly says.

"And, the fact that corn and bean basis levels are weak is a sign that China is not coming into this market just yet. We have a lackluster cash market, due to all of the wheat being fed."

Jack Scoville, PRICE Futures Group vice president, says some bullish news did appear Tuesday. "It started with higher overnight markets on the China talk for corn and soybeans. Also, the USDA released friendly crop ratings Monday afternoon," Scoville says.  

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