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Corn closes sharply higher

Updated: 07/08/2011 @ 2:53pm

CHICAGO, Illinois (Agriculture.com)--The CME Group grain markets settled sharply higher Friday, as extreme hot weather smothers the Midwest.

The Dec. corn futures settled 21 1/2 cents higher at $6.37. The Nov. soybean contract closed 8 3/4 cents higher at $13.46 1/2. The Sep. wheat futures ended 16 3/4 cents higher at $6.51 1/2. The Dec. soybean meal futures contract settled $4.90 per short ton higher at $350.00 and Dec. soyoil futures closed $0.32 lower at $57.31.

In the outside markets, the NYMEX crude oil is $2.35 per barrel lower, the dollar is higher and the Dow Jones Industrials are down 79 points.

Tim Hannagan, PFGBest.com senior grain analyst, ays the rally is well supported by crop-weather. "The trade focus is all on weather and its impact on yields. The monstrous heat dome that sat in the Southwest all year burning up Texas and Oklahoma crops spread into the lower southern Delta three weeks ago and seems to have settled in," Hannagan says.

Within the last seven days, it's radiated north into Kansas, South Dakota and now based on the last report by WXRISK.COM, the weather site, the heat dome is moving into the entire Midwest late next week, he says. 

"The heat dome will center over Iowa by Saturday, July 16, with temperatures over 100. It looks to last to July 20th. The 8-to-14 day temperature outlook sees above normal temperatures and below normal rainfall across the entire Midwest," he says.

Meanwhile, Informa Economics, a private analyst firm, released market-friendly crop estimates Friday. The company's U.S. 2011 corn crop estimate is pegged at 13.75 billion bushels, while the average yield is 162.5 and its harvested acreage estimate at 84.7 million.

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