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Corn ends sharply lower

05/09/2012 @ 9:35am

DES MOINES, Iowa (Agriculture.com)--The CME Group corn, soybeans and wheat markets opened and closed sharply lower Wednesday.

The July corn futures settled 15 3/4 cents lower at $6.07 1/4. The July soybean contract ended 8 cents lower $14.30 1/4. The July wheat futures finished 15 cents lower at $6.00. The July soymeal futures settled $1.30 per short ton lower at $416.00 and July soyoil futures close $0.45 lower at $52.82. 
In the outside markets, the NYMEX crude oil is $0.46 per barrel lower, the dollar is higher and the Dow Jones Industrials are down 72 points.

Jack Scoville, PRICE Futures Group vice president, says today's market is about risk-off trading. "The selling seems to be from specs, mostly big specs.  I think mostly related to outside markets and not really what is going on in our markets.  I think, however, that there is a good chance we have seen the lows of the day already.  We will see if any buying surfaces, but futures are down enough for now," Scoville says.  

Cash corn is still very strong, and soybean futures prices are pausing due to ideas of bullish reports tomorrow, he says

"Let's face it, the markets have been hit hard the last few sessions.  Corn and wheat taking the gas more, after holding the last few days. This seems to be more a risk off trade than anything else," Scoville says. 

Liquidation trading, sparked by austerity fears in Europe, has people getting margin calls all over the world. "This type of activity has hit the ag commodity's technical charts and everybody is puking out," Joe Bedore, FC Stone Inc.'s CME Group floor manager says.

The market is still trying to confirm rumors that China is interested in buying old and new-crop U.S. corn, he says.

"If they bought old-crop corn that old-crop/new-crop spread would widen to 60 cents and not the current 45 cents. The Dec./July spread would be more like a $1.20.

Report Projection

On Thursday, the USDA updates its U.S. Supply/Demand numbers for 2011/12 and releases its first look at 2012/13 Supply/Demand numbers. Plus, the government agency will refresh its world crop production numbers in its report at 7:30am CDT.

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