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Farm markets close sharply higher

Updated: 07/13/2011 @ 2:01pm

CHICAGO, Illinois (Agriculture.com)--While surging on a hot Midwest crop weather forecast, the CME Group corn and wheat markets settled sharply higher Wednesday.

The Dec. corn futures closed 21 3/4 cents higher at $6.79 3/4. The Nov. soybean contract settled 21 1/2 cents higher at $13.79 3/4. The Sep. wheat futures settled 42 1/4 cents higher at $7.14 1/4. The Dec. soybean meal futures contract ended $5.50 per short ton higher at $360.40 and Dec. soyoil futures settled $1.21 higher at $58.53.

In the outside markets, the NYMEX crude oil is $0.57 per barrel higher, the dollar is lower and the Dow Jones Industrials are up 54 points.

On Wednesday, funds bought 20,000 corn contracts, 7,000 soybeans, and 10,000 wheat.

China demand, extreme heat, wind-damaged Iowa corn, and tight stocks, and bullish outside markets are all driving this rally, traders say.

Joe Bedore, FC Stone Inc.'s CME Group floor manager, says weather and signs of funds re-entering the farm markets have produced a rally. "The near-term crop-weather looks hot and dry. Plus, old monies may be coming back into this market," Bedore says. "A market like this brings fund money back in faster. 

Tom White, FutureRoad.net corn pit trader, says it has been a pretty good corn market recovery since a $5.75 1/2 low. "I never trusted USDA's June 30 Acreage Report. And now demand has started. China is just getting started."

White adds, "The market has now filled all gaps which were left from the large move lower several weeks ago.  If we hold up today, we will begin working on a daily trend line break to the upside.  There is no bias for today, but if we hold the $6.52 area or above, we could try to test to the mid-line."

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