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Grain prices settle higher

Updated: 11/24/2010 @ 2:30pm

CHICAGO, Illinois (Agriculture.com)--The CME Group grain markets remain higher from positive overnight markets and a large China purchase of U.S. soybeans Tuesday. 

The March corn futures settled 10 3/4 cents higher at $5.53 3/4. The Jan. soybean contract settled 16 cents higher at $12.55. The Dec. wheat futures closed 5 1/2 cents higher at $6.47 1/2.  The Dec. soymeal futures contract ended $0.50 lower at $340.20 per short ton. The Jan. soyoil futures contract finished $1.03 higher at $50.60.

In the outside markets, the NYMEX crude oil is $2.68 per barrel higher, the dollar is higher, and the Dow Jones Industrials are up 143 points.

Tim Hannagan, PFGBest.com senior grain analyst, says the market is reacting positively to the USDA's announcement of China buying 780,000 metric tons of U.S. soybeans Tuesday.

"The big news today is the USDA release that China purchased U.S. soybeans. This will have the trade wondering if the new 6 to 10 day outlook for dry weather in Argentina and southern Brazil has China returning to over book beans as insurance against continued dryness," Hannagan says.  

Jack Scovile, PRICE Futures Group vice president, says the positive close Wednesday could be a springboard for a longer-term rally. 

"The close was related to the bullish China news. This supports what USDA Secretary Tom Vilsack said yesterday about China buying. Plus, it was noted yesterday that the Central Bank's Regulatory Commission in China was pushing banks to make ag loans, with the idea of greatly increasing production of commodities, as that country  basically runs out now. Corn, sugar and rice were specifically mentioned by the bank regulatory body."

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