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Grain markets remain lower

01/25/2011 @ 9:43am

CHICAGO, Illinois (Agriculture.com)--At mid-session, the CME Group grain markets continue to be pressured by unfavorable outside markets and Argentine rains Tuesday.

The March corn futures are 10 cents lower at $6.45 1/4. The March soybean contract is 20 cents lower at $13.84 1/2.  The March wheat futures are 2 3/4 cents lower at $8.32 1/2. March soybean meal futures are $5.25 lower per short ton at $375.00. The March soyoil futures $0.84 lower at $56.33.

In the outside markets, the NYMEX crude oil is $1.33 per barrel lower, the dollar is lower, and the Dow Jones Industrials are down 49 points.

Despite new soybean demand from China Tuesday, the increased chances for Argentine rains has trumped the market news.

On Tuesday, the USDA announced export sales of 2.740 million metric tons of soybeans for delivery to China during the 2011/2012 marketing year. Also, the government agency reported export sales of 110,000 metric tons of soybeans for delivery to China during the 2011/2012 marketing year. And, export sales reported Tuesday of 114,000 metric tons of soybeans for delivery to Taiwan during the 2010/2011 marketing year.

One CME Group floor trader, requesting anonymity, says Tuesday's soybean sales were built-into the market already. 

"The Chinese sales Tuesday were following the political "frame" contracts as part of the 11 million tons of new crop referenced by the trade delegation last week when the Chinese premiere was in town." 

The floor trader adds, "The new sales are a political 'white-wash'. It's an intent to buy only. Remember, China is going to take 22 to 23 million tons of soybeans. So, the 11 million tons for new-crop was nothing new to the trade. And, the private companies involved sometimes report the frame contracts early as sales. This is nothing we don't already know."

Meanwhile, it's been raining in Argentina and the drier areas of Cordoba received some rain last night and more on radar this morning. "Scattered precipitation is expected the next couple of days and more predicted for late next week. All has contributed to a back and fill break for today's markets," he says.

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