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Corn, wheat close sharply higher

Updated: 05/16/2012 @ 2:41pm

DES MOINES, Iowa (Agricultue.com)--Fresh corn and wheat sales helped the CME Group corn, soybean markets end sharply higher Wednesday.

The July corn futures close 22 cents higher at $6.20, while the Dec. contract settled 11 3/4 cents higher at $5.26 1/4. The July soybean contract settled 9 cents higher $14.22, while the Nov. 2012 contract ended 2 3/4 cents lower at $13.02 1/4. The July wheat futures finished 30 1/4 cents higher at $6.38 1/4. July soyoil futures closed down $1.04 at $50.43. The July soymeal futures finished $7.80 higher at $425.00. 
In the outside markets, the NYMEX crude oil is $1.20 per barrel lower, the dollar is higher and the Dow Jones Industrials are up 18 points.

Iraq has bought 400,000 metric tons of U.S., Russian, Australian, Romanian and Kazakh wheat. USDA announced Wednesday that China bought 900,000 mt of U.S. corn.

Tim Hannagan, PFGBest.com senior grain analyst, says the demand for corn is the leader. 

"This has caused short covering in wheat with light buying in beans. With China selling bean reserves it sets up a slower bean export pace and allows that country a chance to catch up on corn needs," Hannagan says. 

Agricultural grain guys see the dry weather pattern as bearish, speeding up planting, Hannagan says. "But, index funds control pricing and they see the lack of rain as bullish for emerging crops and not bearish for soon to be planted crops. Funds trade the fear of what's growing not what has yet to grow." 

Meanwhile, Terry Roggensack, The Hightower Report co-owner, says that market negativity is still looming.

"A continued push down in metal and energy markets suggests that world money managers are turning quite bearish on commodity markets in general. Until the weather shifts, the market is still likely to anticipate a bumper US crop," Roggensack says. 

For now, the chart pattern looks negative and the demand factors are sluggish, so more selling is likely, Roggensack says.
"The market, however, will be very sensitive to weather. While a record 166 yield could leave ending stocks at 1.88 billion bushels, a 20 year trend yield of 160.5 bu/acre leaves ending stocks at 1.38 billion and if yield is just 3.4% below trend, ending stocks slip under 900 million," Roggensack says. 

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