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Grains close sharply higher

Updated: 02/25/2011 @ 2:07pm

CHICAGO, Illinois (Agriculture.com)--The CME Group grain markets closed sharply higher on demand, fund-buying Friday.

The May corn futures closed 25 1/4 cents higher at $7.22. The May soybean contract settled 45 3/4 cents higher at $13.75.  The May wheat futures closed 28 3/4 cents higher at $8.11 1/4. The May soymeal futures ended $9.80 per short ton higher at $364.70. The May soyoil futures settled $2.30 higher at $57.58. 

In the outside markets, the NYMEX crude oil is $0.86 per barrel higher, the dollar is higher, and the Dow Jones Industrials are up 70 points.

Funds bought 20,000 corn contracts today, pushing up prices. There's continued talk about strong demand. The government thinks the U.S. farmer will need the highest yields possible to meet the future demand. 

Jack Scoville, PRICE Futures Group vice-president, says the markets rallied on some wire stories that Russia was going to import 1.0 million tons of grain soon. "That seemed to push us into stops and also probably created new buying."

The strong weekly export sales for wheat and corn also a big factor here in the upside push today, he says.  "Also, USDA implies that we need to produce every bushel possible in the coming year, because they are taking a very strong view on demand," Scoville says.

In short, there is no bearish news for the markets today and the markets have responded, he says. "We are ignoring geopolitical crap today, after having it run the markets all week.  Now, we are worried about grains and oilseeds again."

On Friday, the USDA reported friendly weekly export sales for corn and  wheat. Also, the government announced China bought 165,000 metric tons of U.S. soybeans for 2011-12 delivery.

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Scoville more than a bit behind? 02/25/2011 @ 2:09pm Every factor he named in this article has been talked about for months. There was no 'new' news. What really happened was that there was the 'correction' of recent days, which coincided with ideologically based opinions that the 'top' had to be in for 'technical reasons' if nothing else. When traders and advisers take physical fundamentals seriously instead of unfounded 'ideology' they will be less easily caught flat footed for explanations. For example, those who interpreted the Middle East convulsions as a threat to grain trading revealed their ignorance of the basis of grain trade in the region. Cold stone fact.

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