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Grain prices pull back slightly

Updated: 09/21/2010 @ 2:21pm

CHICAGO, Illinois (Agriculture.com)--The CME Group grain markets retreated from the recent rally Tuesday.

The Dec corn futures finished 3 cents lower at $5.05 1/4. The Nov. soybean contract settled 4 1/2 cents lower at $10.80. The Dec. wheat futures ended 13 3/4 cents lower at $7.18.  The Dec. soyoil futures closed 23 points lower at $42.82. The Dec. soymeal futures closed $0.28 lower at $307.40 per short ton.

In the outside markets, the NYMEX crude oil is $0.74 per barrel lower, the dollar is lower, and the Dow Jones Industrials are 74 points higher.

Jack Scoville, PRICE Futures Group vice-president, says there were a lot of people talking about a correction day. "It was a mild correction," Scoville says. 

AgResource, a marketing analyst firm, estimated Tuesday that U.S. 2010 corn yields will average 157 bushels, well below the USDA's latest esimate of 162.5. Also, the firm projected that corn prices could rally to $6.00. Other trade firms made similar references, Scoville says. 

"But, I am not sure that many people want to go that low. I think most ideas are around 160-162, from what I understand from talking to others in the trade. This is still basically a weather and yields market with not too much new today."

The markets are clearly keeping an eye on Brazil, where forecasters are increasingly talking about good rains developing next month. "People are trying to make the rains here in the U.S. an issue. But, they (rains) are not a problem," Scoville says.

Demand is solid, with China taking another 170,000 beans overnight. "Basically I don’t think anyone wants to be short and are willing to add on price breaks, which is why the big correction is not happening," he says.

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