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Farm markets finish higher

03/22/2011 @ 2:23pm

CHICAGO, Illinois (Agriculture.com)--After trading lower most of the session, the CME Group grain and soybean markets closed slightly higher Tuesday.

The May corn futures settled 1/2 of a cent higher at $6.86 3/4. The May soybean contract closed 2 1/2 cents higher at $13.65 1/2.  The May wheat futures closed 1 1/4 cents higher at $7.22 1/4.

In the outside markets, the NYMEX crude oil closed $2.13 per barrel higher at $104.00, the dollar is higher, and the Dow Jones Industrials are down 14 points.

Though buying came into the markets late in the day, profit-taking seems to be the major market factor, according to Jack Scoville, PRICE Futures Group vice-president. "It is very quiet and small speculators and the commercial side are not doing much. Farmers are quiet too. So, I think just some profit-taking more than anything."

There was a report Tuesday of Chinese grain buyers denying any purchases of U.S. corn last week. Some analysts believe this denial weighed on the market.

"The whole China 'thing' is hard to trade. Watch what they (Chinese buyers) do, not what they say. Short-term, the flooding, and a lot of it, should be supportive. So, buy the break. I had a lot of long-term patterns reaching a low today or tomorrow," Al Kluis, Kluis Commodities says.

As the end of the first fiscal quarter approaches, investor profit-taking pressured the farm markets, analysts say.

John Roach, Roach Ag Marketing, Ltd., says the big speculators have been liquidating 'long' positions, helping to send prices lower, recently.

"The big spec’s game has changed, at least for now, and you need to get comfortable with the amount of new crop grain you have sold," Roach wrote in his daily newsletter to customers Tuesday.

The big spec fund traders sold a massive 118,000 net long grain and oilseed contracts of futures and options during the week ended last Tuesday, he says. "At the same time, index funds pealed out of over 34,000 contracts of long grain contracts and options. As of Tuesday, those funds were down to their smallest net long position since September 28, 2010 and August 3, 2010 respectively," Roach noted.

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