Grains close out 2011 on bullish note
The grain markets closed out the last trading day of 2011 on a strong note, with corn, soybeans and wheat all ending the day higher.
At the close, March corn was 8 1/2 cents higher at $6.46 1/2, January soybeans were 11 cents higher at $11.98 1/2 and March wheat was 7 1/2 cents higher at $6.52 3/4, according to Barchart.com.
The upward momentum comes mostly on attention to the South American weather situation as crop damage speculation grows with continued hot, dry weather in Brazil and Argentina. Add to that some short-covering among traders, and it was enough to offset some less-than-spectacular grain export numbers and slightly bearish outside market factors, like a lower U.S. Dollar index.
Will the rally continue into the new year? Certainly, there are fundamentals lining up on the upside for the grains, but there are some signals that resistance could pop up soon, at least in the corn pit, says ICAP Energy Derivatives Manager Scott Shellady.
"The rally continues on this last day of trade before the new year. Corn, beans, and wheat continue their steady rally to the upside as drier than normal weather conditions in South America threaten to damage the crop. This weather concern is seen by many to be cutting into previous estimates that of the global harvest and has thus driven prices steadily higher," Shellady said Friday. "From a technical standpoint I think that we could start to see some resistance coming into the market around 650 area. This year end holiday rally has been steady and backed by fundamental concerns, so by all means I respect it, but I will continue to monitor the global economy to gauge global demand to see if this thing will continue to have some legs."