Soybeans close 45¢ higher
DES MOINES, Iowa (Agriculture.com)--A rainless Argentina and a lower dollar sparking demand have the CME Group soybean market sharply higher Tuesday.
The March futures corn contract settled 3 cents lower at $6.95. The March soybean futures contract finished 45 cents higher at $14.70. March wheat futures closed 10 cents lower at $7.32 per bushel. The March soyoil futures contract ended $0.91 higher at $52.53. The March soymeal futures finished $15.90 per short ton higher at $425.30.
In the outside markets, the NYMEX crude oil is $0.59 per barrel higher, the dollar is lower and the Dow Jones Industrials are 51 points higher.
Tim Hannagan, Alpari (U.S.) LLC senior grain analyst, says the rally in soybeans has a lot to do with the market recouping losses.
"After a $1.00 drop in prices the last 8 trading days, there was room for profit taking. Two issues triggered the move. One, a China trade group late Friday announced they agreed to a billion dollar plus trade agreement with a major Midwest state producer. This is not uncommon for this time of year, as they come to the US before spring to negotiate good trade policies," Hannagan says.
The China delegation finish its visit in Washington to sign the new years trade agreement.
"That was friendly today, because it confirms that they intend to buy big again this year and it puts pressure on the U.S. to grow a bigger crop.Two, weekend rains needed in southern Brazil came in much lighter than expected," Hannagan says.
In addition, the big drop in soybean prices the last week saw a increase in new short positions by 27,000 contracts.
"They all wanted out today. But, more rain looks to come this week. So, expect a soft spot in prices Wednesday, as funds turn the page to what's new," Hannagan says.