Corn, soybean prices close sharply higher
CHICAGO, Illinois (Agriculture.com)--CME Group corn and soybean markets cut early gains, still close sharply higher Monday.
The Dec corn futures closed 27 1/2 cents higher at $5.55 3/4. The Nov. soybean contract closed 17 1/2 cents higher at $11.52 1/2. The Dec. wheat futures settled 10 cents lower at $7.09 1/4. The Dec. soyoil futures closed 27 points lower at $46.35. The Dec. soymeal futures contract closed 10.90 higher at $327.10 per short ton.
In the outside markets, the NYMEX crude oil is $0.38 per barrel lower, the dollar is higher, and the Dow Jones Industrials are up 11 points.
The grain markets continue to react to last week's bullish USDA Crop Report that lowered corn and soybean yield expectations for 2010.
Jack Scoville, PRICE Futures Group vice-president, says follow-through buying is occurring from Friday.
"But, I am also seeing some profit-taking and some peple coming in to 'short' the market. I had targets in corn up near $5.75, and the limit up move last night might be enough for the moment. No doubt we are short corn, but we have left some big gaps that the market might try to fill first. My guys have been interested in taking profits on longs or selling, not buying up here," he says.
Scoville adds, "My talks with corn users indicate that rationing is going to start now with these prices. They (end-users) will look for other feed ingredients, this includes Latin America as well as the U.S. So, maybe today we blow off at least for the short term."
Tim Hannagan, PFGBest.com senior grain analyst, says today's rally, on the open, priced in Friday's crop report. "Because Friday's market opened limit-up, not allowing traders to buy the bullish report, this left Sunday night and Monday with expanded limits to allow anyone caught short or wanting to buy long their chance to trade."
Hannagan adds, "It appears that failure to lock limit up on corn or beans early today may suggest we have exhausted the rally. Keep in mind that this rally began last Monday with short covering and buying into Thursday prior the report's release. A close limit up today for corn would set up higher prices Tuesday. But, funds are fat with profits on new contract highs and they took profits twice in September, mid and late month, off new contract highs each time. A early week high could be faded by the funds."