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Grain prices close sharply higher

Updated: 10/05/2010 @ 1:53pm

CHICAGO, Illinois (Agriculture.com)--Holding on to a session-filled rally, the CME Group grain markets close sharply higher Tuesday.

The Dec corn futures settled 19 1/2 cents higher at $4.91. The Nov. soybean contract settled 17 3/4 cents higher at $10.71 1/4. The Dec. wheat futures closed 16 1/4 cents higher at $6.63 1/2.  The Dec. soyoil futures settled 37 points higher at $43.82. The Dec. soymeal futures contract closed $0.70 higher at $299.30 per short ton.

In the outside markets, the NYMEX crude oil is $1.36 per barrel higher, the dollar is sharply lower, and the Dow Jones Industrials are up 189 points.Japan's altering of its yen has rocketed the markets higher. It's tumbling the dollar, which is bullish for the grains, traders say.

Tim Hannagan, PFGBest.com senior grain analyst, says today is a continuation of Monday's bullish action. "Traders with short positions and big profits, on last week's break in prices, are buying back those positions as new speculative longs enter off the early week lows on two issues. One, they expect corn yields and production to come in lower on Friday's USDA Crop Production Report. The lower expected yields are based upon the southern Delta's and eastern Corn Belt September harvests that recorded the lowest crop ratings." 

Hannagan adds, "In September,  record Chinese soybean purchases sets us up to see the report show an increase in bean export projections, possibly leading to lower ending stocks. It's all about the fear of the next report and the fear is it could be bullish. This will be the third consecutive month a rally occurs off of a government report."

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