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Corn, wheat close higher

Updated: 08/09/2011 @ 2:49pm

CHICAGO, Illinois (Agriculture.com)--A stock market turnaround from the Fed's reassurance of leaving interest rates low for an extended period of time kept the CME Group grain prices underpinned Tuesday.

Menwhile, improved weather pressured the soybean market.

The Dec. corn futures settled 2 1/2 cents higher at $6.88 1/2. The Nov. soybean contract closed 11 3/4 cents lower at $12.99 3/4, a five-month low. The Sep. wheat futures settled 15 1/4 cents higher at $6.71 3/4. The Dec. soybean meal futures contract closed $2.90 per short ton lower at $343.60 and Dec soyoil futures ended $0.74 lower at $53.70.

In the outside markets, the NYMEX crude oil is $1.83 per barrel lower, the dollar is lower and the Dow Jones Industrials are up 183 points. The Federal Reserve announced Tuesday that it will keep interest rates low through 2013.

Tim Hannagan, PFGBest.com senior grain analyst describes today's mostly higher trade as a classic example of what the trade calls turn around Tuesday. "Each Tuesday of the year sees the market reverse what it did on Monday," Hannagan says. 

This arose as markets built up either buying pressure or selling pressure, depending on what was happening on foreign markets and news over the weekend, he says.

"Then we would see all this pent up buying or selling on Monday. A big move with profits was followed by Tuesday, the day to reverse and take profits to the bank. It still appears the grains will follow the outside market influence but unless those markets collapse Wednesday we should expect more traders wanting to be long into the Thursday USDA Supply/Demand Reports."

The order of importance to be long into the report sees corn then beans and lastly wheat, Hannagan says.

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