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May farm markets end lower

05/31/2012 @ 9:37am

DES MOINES, Iowa (Agriculture.com)--With improved rainfall, a strong U.S. dollar, and end-of-month selling, the CME Group soybean and wheat markets finished the final day of May lower Thursday.

The July corn futures settled 2 3/4 cents lower at $5.56, while the Dec. contract finished 1 1/2 cents lower at $5.19. The July soybean contract closed 31 1/4 cents lower $13.42, while the Nov. 2012 contract settled 22 cents lower at $12.71. The July wheat futures ended 11 1/4 cents lower at $6.42 1/2. July soyoil futures ended down $0.39 at $49.30. The July soymeal futures closed $14.90 per short ton lower at $395.00. 
In the outside markets, the NYMEX crude oil is $1.25 per barrel lower, the dollar is lower and the Dow Jones Industrials are up 4 points.

Matt Connelly, an independent CME Group floor trader, says the macroeconomic factors have their thumb on the farm markets. "There is a risk-off mentality because of Europe. Investors are long beans, still, but flat wheat and corn," Connelly says.

Jack Scoville, PRICE Futures Group vice president, says the grain prices have held well, but the soy complex is seeing what I think is a lot of liquidation trading.  "Some of the weakness has to be based on the rain, some is based on the calendar," Scoville says. Cash markets are tight, but demand news is hard to find. I would not be surprised if we are near lows. Crops will be looking good after this rain, and now we traditionally start to dry out a bit. So, I think we should be near a low."

The market bias has not changed much but the market structure has, one CME Group floor trader, requesting anonymity, says. 

"Soybeans were in retrospect overly subscribed with fund length and it has been a month of liquidation. Dollar strength in light of EU problems, has helped to move the majority of beans off the farm in Brazil," the floor trader says. C

Chinese and EU importers are moving to spot traders, with high uncertainty in financial markets all helped to break price trends.
Beans are on 50% retracement and not interested in giving back upside coverage without knowing crop area or yields, the floor trader says. 

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