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Farm markets sell-off

05/19/2011 @ 9:53am

CHICAGO, Illinois (Agriculture.com)--After starting stronger, profit-taking dragged down the CME Group soybean and grain markets Thursday.

The July corn futures settled 1 1/2 cents lower at $7.48 1/4. The July soybean contract closed unchanged at $13.79 1/2. The July wheat futures settled 5 cents lower at $8.12. The July soybean meal futures ended $0.04 per short ton higher at $361.40. July soyoil settled $0.16 higher at $57.46.

In the outside markets, the NYMEX crude oil is $1.03 per barrel lower, the dollar is lower and the Dow Jones Industrials are up 35 points.

Tim Hannagan, PFGBest.com senior grain analysts, says this market was easy to read. "Pretty simple, a higher open making new grain highs for the week. We hit chart resistance then some profit taking on the week, before they go long into Friday's close, in anticipation of next week's big rains. This should give us a higher opening to start next week."

Meanwhile, a CME Group floor trader, requesting anonymity, says the firm cash markets in the eastern Corn Belt helped the futures market early. "Also, drought talk in Western Europe, yesterday, was a new bullish feature for the market to digest, with analyst there talking grain production down 8-11% between Germany and France," he says.
Also, near term forecast that call for wet conditioned keeping North Dakota, Mich, Indiana and Ohio planting slow, he says.

"Some expect 1.5 million lost corn acres, due to continued wet fields." Soybeans don't need to rally on poor margins in China and cheap offers out of South America, he says. "Today's market was a corn, wheat and rapeseed traded issue. So, oil up meal down. Front-end corn is firm, wheat, finished lower, but for most part held its own," the floor trader says.

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